More and More “Short Sales” aren’t shorting the first mortgage holder.

I just got off the phone with a homeowner who thought she was in a terrible situation, turns out, it’s a lot better than she thought. She has been holding on to this property for years, paying $1,000 a month out of her pocket, waiting for the market to get better. The great thing about this is she’s only got 1/2 a “Short Sale”. In other words, she has two mortgages, because she’s waiting until now to sell, she will only need approval from the 2nd mortgage company to sell her property. This also means that she will have the first mortgage reported as “Paid as Agreed” which will increase her credit score. She will be shorting the second mortgage, but it is possible that it will only affect her credit for a short time. The best part is, she doesn’t have to pay back the second mortgage (in California) and she can take that $1,000 she was wasting every month and put it towards something good…like paying off her student loans, taking a much needed vacation or having an emergency fund.

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