I am current on my mortgage. I applied for a short sale with Wells Fargo and was approved late July. I am being told from one person at WF that since I have the approval that no more regualr monthly mortgage payments should be made by me. That WF takes into consideration their pay off amount without me making any more payments. I am told I cannot talk to my Neg directly to confirm. I called WF again and someone else said they didnt know but suggested I continue to make payments if I can until the closing. My payment is over $ 2200.00 so it is not small change. I have a call into someone but they can take up to 3 business days to call me back and by then I will be offically late with payment (I think). I want to avoid WF reporting my payment late to the creditors.
Once a SS is approved, do I still pay monthly mortgage payment until closing? I live in NJ if tha helps
**********************************
like buttons
Replies
Well the end to a interesting story. I got a notorazied letter from Wells Fargo stating my mortgage was paid in full. I checked the credit bureau's reports and only one reported the morgage as a short sale. I faxed them the letter from WF's and they immediately took it off. I am glad we decided to stay current on the mortgage payments until we were closed. Otherwise tht would have been on our credit and no way to fight it. House gone and credit intake. I kind of feel one was scored for the small guy for once. I have to say except for small issues dealing with WF was pleasant.
Great!
And I was just going to mention that (about the possiblity of the pay off being so close or almost short...) now it makes even more sense. So you know it now... And I wish you the best of lucks!
Take care!
We closed!!! a couple of small problems at the last minute but all is done. Here is my question...Between what WF made from the sale, that they kept from escrow and what the VA will pay them, there will not be a shortage to the bank when all the money is processed. I was thinking of challenging the short sale that the bank claims they will report to the credit bureaus.
what are my chances you think of not having the short sale on my credit report? After all the bank isnt going to be out any money.
Whoo oh! Congrats! I am glad to hear that!
That is a great question. I assumed you ask if there is any shortage and how it will be reported. Well, there will be a "shortage" on the proceed, that is why the transaction is a short sale. However that shorttage has been "approved and accepted" by the lender. Lender has agreed to accept less as the total payoff.
Depending on your state, you should consult and attorney or CPA regarding deficiencies(shortage not paid through the short sale or bank loss) and the 5 possible negative consequences : 1.- Cash contribution(requested before closing), 2.-Promissory Note (requested before closing) , 3.- Deficiency judgment (talk to attoney or CPA), 4.-Tax consequences(check deb forgiveness act) 5.-Credit consequences.
Regarding your credit and how the lender will report it, please know this:
In my experience most lenders report : "amount settle for less than the full balance" Which is ok. THE PROBLEM is that I have never seen the wording "short sale". I have actually seen "Foreclosure, settler for less... " or "collateral sold for less...." or "RePo ..."
I have seen this happen so many times, specially helping people that shortsold their homes and now what to buy. Usually it takes some time to get back to the bank and ask them to please correct the reporting.
It is up to the lender how they will report it and what wording will they use.
But it you stay on top of this, you may be able to monitor your credit (run it after prob a month) and know from day 1, what have they reported and if needed, dispute it! Good luck on this and please keep us posted!
Enrique v. Plaza
Enrique Vasquez-Plaza said:
Wow, what a great question, what even greater situation (really).
1.- PAYMENT OBLIGATION.- The first thing you must understand is that making the payment it has been, and will always be (until ss is closed) your responsability. Late payment will be reported to the bureaus.
2.- APPROVAL BEING CURRENT.- On the other side, the situation is incredibly exceptional due to the fact that the short sale has been approved while you did not incur into delinquency. If you continue making timely payments you will have the great chance of having a ss approved while maintaining a good credit (if you previously had one) the short sale itself does not damage your credit, the late payments do, and the way the account may be reported "settle for less than the full balance", may give you some issues later, but most creditors would be ok with it... So keeping it that way is VERY VERY worth the extra effort.
3.-LATE PAYMENT & POSSIBLE LIABILITY.- a late payment is a 30 day late. Most people freak out after they are late for more than 15 days (which is when late fee kicks in) but they are really not "officially late for the bureaus" . Creditor will report after you haven't pay for 30 days. Regarding your doubts about the unpaid balance being settle in its entirety including late payments or pending payments, the answer is YES: all delinquent balances, escrow shortages, and everything that constitutes the lien will be flushed down the toilet. Your doubts are pure logic, I would asked myself the same things 6 years ago... HOWEVER, mistakes are always made, and it wouldnt surprise me to see a bill after the ss is close trying to get the last payment. HERE IS were attorneys can talk to you about the civil codes and laws about deficiency and the approval being in writing, and bla bla bla.... But bills are automated docs sent... so it would be a mistake... I don't even think the lender can legally pursue you after the ss for that payment... but call the attorneys... Sometimes they get pay to answer silly questions, but most of the time, they are your real solution...
4.-DO YOU CONTINUE PAYING? considering that the mortgage payment is your responsibility the answer is YES, but considering that the lender has settle for X amount, you really don't have to - nothing will happen-, unless the lender requires you to continue making payments as a condition of the ss... Your chances and being liable for something like that are slim... But, why risk? Just finish paying, and dont forget about the 30 day late, because the ss may close at day 20th, so you save yourself some 2200... unless the lender requires you to continue making payment as a condition of the short sale. (I had that happen once with Litton loan) BUT you credit will get damage... so I really hope this helps. If you comply with minimum net required for short sale, everything will be included (yes, the payment you did not sent too) but, you are so close, you better save your credit! You are in such great position!
Did you know that your chances of buying right away are way more open just for staying current? And buying a car, and doing so many other things? I congratulate you! Good luck!