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 May 06, 2009

Short Sale Sellers being chased by Lenders
More and more lenders are going after mortgage holders who opt to sell their properties for an amount less than they currently owe. This transaction is commonly referred to as a "short sale". Lenders are going after these types of sellers in order to recover more of the difference between what they owe on the home and the amount that the home sold for.
Lenders utilize the following criteria when considering whether or not to pursue a borrower which has sold their home via a short sale:

1. What was the amount of the unpaid loan?
2. Did the owner hold the property as a personal residence or as an investment?
3. What is the borrower's income and what other types of assets do they hold?
4. What is the mortgage insurer's policy or the holder of the 2nd lien?

A spokesman for PMI Group states that the mortgage insurer will tend to first target borrowers who sell who are not experiencing any financial hardship, instead those who made the choice to walk away from the home because of declining property values.