This is a tough question and I will soon have an answer for a current client. Part of the required short sale package of papers is a Hardship Letter. They want the homeowner to explain the circumstances that have caused them to ask for a short sale. <UPDATE: The bank approved for them to submit an short sale offer even though they haven’t missed a payment.>
The position at the bank that deals with short sales is call a loss mitigator. Depending on the bank the loss mitigator can be dealing with 500 – 1200 deals at once.
I have had banks take 6 weeks to give a response but have gotten two foreclosures postponed in 5 days or less. Their priority is the biggest fire and the biggest fire is usually the home that is closest to foreclosure.
I have heard of some short sales being approved for medical issues without missing a payment but that is all so far. The deal I am working on right now will be my first attempt to see how a bank responds when a payment hasn’t been missed. The unfortunate part is that even with the answer I get from the bank, it will only apply to them. Except for the short sale package there is no uniform process with the banks regarding short sales.
So should you miss a payment to expedite a short sale? That is not an answer I can give. What I suggest is you talk to your bank before you miss a payment. I have heard of good things happening for some owners. If you don’t like the answer call back and talk to someone else. I have heard that works too.
Also try to modify your loan. I always prefer my clients keep their home if it works financially with a modification. Once you do miss a payment and are sure you won’t be able to catch up, you need to look into a short sale.
