Bank Advising Seller to Be Late on Mortgate Payment!?!?!?

The best advice I can give on Short Sales is stay away from short sales.  The banks are very dificult to work with.  For your question, yes, the bank has the final word not the seller.  You will also be expected to cut your commission in most cases and there is nothing you can do about it.  It is written right into the contract.  Most banks won't even entertain a short sale until the borrower is 4 to 6 months late on their mortgage.  Did I mention that I don't care for short sales?  I refuse to list or show one.

Interesting -- never heard of a bank telling somebody to miss their payments. Sounds more like it was the loss negotiator.

Banks really don't have a consistent method for short sales so while one bank may be cooperative and helpful, there are certainly banks that are not.

As for the notch on the credit -- depends on the bank and you can try to negotiate that out but it's difficult. Another method if the seller wants to try to save their credit is sign an unsecured note for the difference.  

(Regardless, a short sale is bad on the credit so don't ever tell anybody they can save their credit by doing a short sale. I've seen some of this advertising going on and it's misleading -- unless the seller is willing to sign an unsecured note to cover the difference and the bank agrees on it, more then likely the credit is going to take a big hit.)

As always -- keep very detailed notes of every conversation with everybody and get everything in writing when possible. Some of our files are huge!

Good luck and keep learning - every single one of them is still a learning process!

 

 

Cherimie,

I've never heard of a bank saying you should be late. But yes a short sale is really just a notch above a foreclosure. When we do a pre-qual we treat them the same - the only difference is that a credit report with a short sale seems to have a higher credit score than one with a foreclosure. That is an invalid point because you need to be 3 years removed from both to qualify for a mortgage. I guess once that happens you're likely to get a better rate with a short than a foreclosure.

The lender has a final say on which short sales they will approve and which they will not.

Thanks,

Shailesh Ghimire 

Cherimie,

Short sales are a foreclosure.  They key is when the sale starts.  are they already late and facing foreclosure so they are trying to "bail out" or are they able to keep up with the payments but need to sell or want to and have they contacted the investor to work this out.... I am working with one out of state right now...... they are current on the loan..... and the investor is willing to work with them because of that and they have been up front about everything (this is a job transfer from a declining market).  On the flip side I have some one trying to do a short sale that is well lets just say one second away from the foreclosure but the lender has been patient becuase the home is listed (the lenders dont want the homes) but the borrower hasnt made a payment for a year...... and the lender calls the realtor every week for an update.....

the first will be able to buy a new home and the second well, they wont for at least 3 years