I canNOT Advise You on Whether You Should Stop Paying Your Massachusetts Mortgage to Complete a Short Sale!

I canNOT Advise You on Whether You Should Stop Paying Your Massachusetts Mortgage to Complete a Short Sale!

Missing your mortgage payment?

This is the number one question I get from homeowners who work with us and aren’t in default.  It’s unfortunate too, but I will not advise a homeowner on whether or not they should stop making payments on their mortgage.  I’ve HAD countless homeowners tell me that “someone” told them to stop paying their mortgage, but I’m not an attorney and as far as I’m concerned, only an attorney can advise a homeowner to stop paying their mortgage.  Agents, negotiators, and others should not be giving advice on this question.

What I CAN tell a homeowner is most lenders (servicers) do not necessarily require a homeowner to be in default, but they must have some sort of documented hardship.  Fannie and Freddie have both announced that borrowers do not need to be in default to have their sales approved, but they must meet certain criteria in order to be evaluated for the sale.

The criteria must be met:

  • death of a borrower or death of the primary or secondary wage earner in the household;
  • unemployment;
  • increased housing expenses (that is, ARM loan rate adjustments);
  • disasters (natural or man-made);
  • business failure;
  • long-term or permanent illness or disability of borrower, co-borrower, or dependent family member;
  • divorce or legal separation of a borrower or co-borrower; and
  • employment transfer/relocation (including Permanent Change of Station order for military personnel) greater than 50 miles from current primary residence.If a borrower has another hardship not listed above and can document it, the servicer MUST review the package and make a determination on whether the short sale should be allowed or denied and that determination will be sent to Fannie or Freddie for review.

Please understand we work with attorneys who will look at this criteria and potentially advise a homeowner or whether or not they should pay, but no one in Massachusetts other than an attorney should be advising a homeowner to skip a mortgage payment in order to complete a short sale.

Maryann Little, VP Mitigation

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