Short Sellers labeled as “Strategic Defaulters,” even though Lenders Required Default!

The second problem causing a backlash against short sellers is that the press was reporting that short sellers were “strategically defaulting,” or choosing not to make their payments even when possible, when reality was that SHORT SALE LENDERS REQUIRED MORTGAGE DELINQUENCY to approve a short sale. Homeowners allowed 3-way calls to confirm this was being told to them by their lenders… and the homeowners were telling the truth. Loss mitigation practices for most investors require mortgage delinquency for a short sale approval… to this day.


The Root of Problem: Lender required delinquency policy needs to be changed!

Loss mitigation practices for most investors require mortgage delinquency for a short sale approval in the first place and that policy continues today.

If underwater homeowners were given an option to stay current through the short sale process, lenders would receive a greater net amount for the property.

If given the option, homeowners would stay current to keep credit built over a lifetime intact, even with hardship.

That is how important credit is to these consumers. Credit is the benchmark for the mortgage industry. This policy is knowingly destroying consumer credit and needs to be changed!