Gerald Lucas

Are you eligible to apply for a short sale even if you've already tried to modify your mortgage loan? Your effort as a borrower to short sell your property should never appear to be a strategic default to your lender. A strategic default is a decision by a borrower to stop making payments on a debt despite having the financial ability to make the payments. Banks don't like to approve short sale applications when it looks like a borrower can pay but simply chooses not to pay.

In a short sale, because of the extra time required to negotiate with the seller's bank, the task of finding and then maintaining a patient buyer is critical to successfully completing the sale. Here are 5 essential tips for getting and then keeping a buyer throughout a short sale transaction:

When debt is closing in on you, it's natural to want to get away and run for cover. If you're already in a tough financial situation, it's hard to imagine things getting worse. Unfortunately, when you deliberately dodge your mortgage lender, you reduce the number of choices you have and you give your bank more control over your future.

What impact will a short sale have on your credit score? The correct answer is that it depends. Your credit score is calculated based on a complex formula that tries to figure out the likelihood that you will not pay back your debts.

Before a homeowner sits down to write the hardship letter for their short sale application, they often ask me how long the letter should be. There are two schools of thought on how long a hardship letter should be. One school contends that a hardship letter should be as short as possible.

One of the biggest complaints people have about short sales is how long they take to complete. Here are 4 specific tips proven to speed up the short sale process:

Financial setbacks that affect a person's ability to pay their mortgage are heartwrenching, especially for homeowners with good credit who have always paid their bills on time. It's very easy to get discouraged and want to give up when you fall behind on your mortgage payments.

There are many factors that affect the amount of time required to complete a short sale. The number of mortgages tied to a property is one major factor. For example, it normally takes longer to negotiate with two or more lenders than it does to negotiate with just one. The process also tends to take longer when a loan has private mortgage insurance (PMI).

Most people who are thinking about doing a short sale want to know what happens to the unpaid loan balance after the sale. Homeowners often ask me if they are going to be responsible for the difference between the reduced amount their bank receives at closing and the amount they actually owed for their mortgage.

If your mortgage loan balance is higher than the value of your property and you don't have the money to make up the difference, you probably want to know whether you'd qualify for a short sale. To find out, we have to look at a short sale from a bank's perspective.