Short Sale Lenders Lying to Mortgage Holders

by Bill Gassett on December 21, 2010 · 9 comments

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Short Sale Lenders Lying to Mortgage Holders

Short Sale Lender Lying

Over the last few years while working with Massachusetts sellers looking to short sale their home I have encountered on a couple occasions folks that were deliberately lied to and told that a short sale was not possible.

Fortunately these particular home sellers were savvy enough to realize their short sale lender was lying to them. They had done a little research online and knew that losing their job was a legitimate short saleĀ  hardship and the fact that their home was under water made them perfect candidates.

They just happened to be speaking with someone in the collections department and not the loss mitigation department.

What home owners need to be completely aware of is who they are speaking with at the lending institution. The department that you reach will have a huge impact on what information you are relying on!

It should be crystal clear that lenders have three separate departments that handle borrowers who are in default with their loan. There is the loss mitigation department, the foreclosure department and the debt collections department.

The loss mitigation department is who you should be speaking with any questions related to short selling a home.

When you miss mortgage payments on your loan you may get a call from the collections department asking you to get current again. Make no mistake about it some of these people on the phone are ruthless and will say anything to you in order to get you to send them money.

You may even ask them about short selling your Massachusetts home and they will say you can’t. They don’t care because their goal is to get more money out of you.

If you are considering a short sale you DO NOT want to be speaking with anyone from this department!

What is sad is that there are probably lots of folks who have been told the same thing and just relied on the statement as being fact. Some of these poor sellers, having been told that a short sale is not possible, just let the bank take their home via a foreclosure.

Recently I met a seller who was attempting to do a loan modification and was told that in order to get the loan modification they would have to come up with the amount they were in default.

The amount was over $18,000 which they came up with by depleting their savings including retirement funds! Well guess what the lender after receiving the funds denied the loan mod. This unlucky home owner happened to be speaking with the collections department who duped them into giving them the funds. The lender receiving these funds should not have played any part what so ever in the owner getting approved for a loan modification.

They are now either left to short sale their home or face foreclosure. They wanted to stay in their home and were hoping the bank would restructure their loan in order to make that a possibility.

The take home message here is never to rely on anything your lender tells you. On many occasions the person you will be speaking with is nothing more than a glorified clerk. If you have ever called a lender you probably realize you never speak to the same person twice.

If you have run into financial difficulty and need to short sale your home talk with either a Real Estate attorney or a Realtor who has experience with short sale transactions.

Who you work with will have the greatest impact in helping your reach your financial goals. Completing a short sale remains a much better alternative than letting a property go to foreclosure for a number of reasons centered around credit and your ability to buy another property in the future.

I am successfully completing short sales through out the Metrowest Massachusetts area as well as parts of Worcester County. As of this writing in almost four years, knock on wood, I have a 100% success rate for short sale approval!

I work hand in hand with a local short sale Real Estate attorney who knows how to get short sales done!

If you are outside of the Metrowest Massachusetts area or even in another state and need to do a short sale please feel free to contact me and I will be happy to refer you to a Realtor in your location that handles short sales and knows what they are doing! I have referred short sales to numerous Realtors all around the country.

Other short sale articles worth a look:

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About the author: The above Real Estate information on short sale lenders lying to mortgage holders was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 24+ Years.

Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!

I service the following towns in Metrowest MA: Ashland, Bellingham, Blackstone, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northboro, Northbridge, Shrewsbury, Southboro, Sutton, Wayland, Westboro, Whitinsville, Worcester, Upton and Uxbridge MA.

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