questions & answers

Question: I have resigned my job due to health issues, relocating to the east coast to live with family, and can not make my house payment, willing to surrender the house to Bank for short sale, or whatever they want to do. How do I start this process. The house will not sell for what I owe the bank, negative equity situation.

Answer:

Generally, when a homeowner is in a situation where he or she will be missing payments, that homeowner should contact their lender immediately. The loss mitigation department is the department that frequently talks with homeowners who have or are going to miss payments. The sooner a homeowner contacts the bank, the more options that will likely be available.

A short sale usually requires that the house is listed with a realtor. Contact your lender and ask to speak to someone in the loss mitigation department. The loss mitigation department should be able to tell you options that are available for you. As of late last year, a homeowner interested in a short sale of his/her property needed to meet two criteria. First, the homeowner must have missed at least one mortgage payment with consequent damage to credit. Second, the mortgagor must have default of credit card bills. Short sales may take two months at a minimum. However, if there is a second mortgage the process may be more complicated.

As the process changes at times, it is important to contact your lender directly. Additionally, you may want to sign up for Lawyers Helping Homeowners or look at the article on Avoiding Foreclosure of your Home.