Replies to This Discussion

Permalink Reply by Bryant Tutas on October 23, 2012 at 12:57am

Possibly. But I would certainly try to find a hardship reason. Why are they selling?

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Permalink Reply by Ron Scribner on October 23, 2012 at 4:07am

Typically a short sale is for a documented hardship. You are moving for a job and/or you have documented financial difficulies. Being upside down is not a hardship. If that were a hardship, the auto industry would see pape being rewritten daily or cramdowns on loan balances being changed daily. There are no clauses in any loan documents that say, "Only pay your mortgage if your value exceeds your loan balance".

That being said, if you are in default for one of the above reasons, most lenders will entertain a short sale scenario. If you stretegically default because you don't like being upside down in your home, you have a larger battle with a lender/servicer in getting a short sale approved.

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Permalink Reply by Rita Colon-Burnett on October 27, 2012 at 3:37pm

They may have had an illness or unexpected expense that caused their first missed payment or inability to pay.
This would need to be stated in the hardship letter.

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Permalink Reply by Kimberley Kelly on October 28, 2012 at 3:09am

Many other reasons qualify for hardship.  Death in the family, divorce, relocation, medical bills..what's going on with this client????

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Permalink Reply by Karen Mathers on October 29, 2012 at 11:07am

You don't always have to have one big hardship that you can point to.  Perhaps the homeowner has had an increase in expenses?  We all have seen that.  They can talk about the cost of gas, homeowner's insurance, auto insurance and food. They may be having to make some major home repairs? They may have had children and now they have childcare to pay? Or a divorce . . . that is one area where the income is not the hardship.   I don't know how hard the banks look at credit card debt but that may have increased along with other payments making it a tight squeeze for your seller.  Maybe your seller was paid a bonus or overtime in the past and now he does not.  It seems like with the economy being the way it is, it is not hard for people to prove a hardship. 

 

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