REALTOR® Magazine-Daily News-Lenders Chase Short Sale Sellers
I’m not surprised that lenders and private mortgage insurers (PMI) are going after homeowners who “walk away”. Sadly, many homeowners don’t realize the potential jeopardy they face by not negotiating with their lenders. Yet even more sad, much of this could be avoided. Poor customer service levels and lack of cooperation by many lenders don’t give homeowners with mortgages in default much reason or hope to try to work something out.
An increasing number of lenders are going after borrowers who sell their homes for less than they owe – known as a short sale – in order to recover more of the difference between the amount owed and the sale price.
Lenders say the factors that they consider when they decide to seek more money are:
- How large was the unpaid debt?
- Was the property an investment or a personal residence?
- How much money does the borrower make and what other assets does he have?
- What is the policy of the mortgage insurer or the holder of the second lien?
A PMI Group Inc. spokesman says the mortgage insurer “primarily target[s] borrowers who are not experiencing hardship – but those who simply elected to walk away from the property due to its decline in value.”
REALTOR® Magazine-Daily News-Lenders Chase Short Sale Sellers
