Short Sale Myths

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Dear Sue,

I am planning on moving my family out of state. We need to sell our home first. Our Realtor said that we owe more than it’s worth so we need to do a short sale. I have heard that the lender won’t approve a short sale unless we are behind on our payments. Is this true? We have never missed a payment in our lives!

Moving Mike

Dear Mike, If your credit is important to you and you can still make your payments, then do it! The story about not making your payments is a myth. Don’t fall prey to it. A short sale does not always affect your credit but not making your payments will. Missing payments will compound your problems. You will have excess interest and penalties. Your credit rating will suffer.

A low credit score means higher interest rates on credit cards and any money that you borrow in the future. Make your payments!

Dear Sue, I am in construction and have been out of work for over a year. My unemployment and side jobs have been getting us by. It is getting to a point where I can no longer make my house payments.

I don’t know if I should just walk away or try a short sale. Maybe I should try a loan modification?

What I do know is that I can’t go on like I have been. Something has got to change.

Broke Bob

Dear Bob, You must have sufficient verifiable income to qualify for a loan modification. Go to FinancialStability.gov for qualifications and guidelines.

If you decide you can’t do it yourself, don’t send your money to an advanced fee company without knowing for sure that they are legitimate. It’s best to have personal references. Be sure to check the DRE web site to make certain that they are listed as legitimate.

There have been way too many scams!

I would recommend that you engage the services of a trusted financial adviser, one that is not selling you anything. You want an adviser who can objectively evaluate your financial situation. Try your CPA or tax attorney. Evaluate all of your options and make your decision based solvency, credit and tax implications. It will be a matter of good home $$’s and Sense.