Posted on Mar 21, 2012 in Roseville and Sacramento Short Sale FAQs

Hi Mark Peek here with Keller William’s Real Estate, your short sale specialist for the Roseville and Sacramento area. Today’s topic is mortgage insurance. Do you have mortgage insurance on your loan and are considering a short sale? Sometimes it’ll show up on your mortgage statement as PMI or it could have another coding.

If you have mortgage insurance on your loan and are contemplating a short sale, it’s really important to understand and make sure you’re presenting a relevant hardship. They are one of the few people that actually read a hardship letter and will go through your entire credit report and look at all of your bank statements. Mortgage insurance companies have to pay out the loss whether it’s a short sale or a deed in lieu to foreclosure, but there’s really no incentive for them to approve a short sale. Sometimes it’s in their benefit to do so if the loss is less and they’re going to pay out less of a premium. However in most cases in our area with the home values that have declined the way they have, in some cases it’s been 50%, that mortgage insurance premium has been maxed out.

So, how do you persuade a mortgage insurance company to approve a short sale and agree with everyone else? They want something, so they’re going to dig through everything you’ve got; that’s why it’s important to work with someone who knows and can identify that ahead of time before it becomes a problem. There are many ways to mitigate and get around it. It’s important to identify all of your decision makers and your mortgage insurance company is one of the more important ones. If you don’t come up with a strategy ahead of time, it could actually backfire on you and keep you from getting your short sale approved.

If you have any additional questions, please fill out the Getting Started form on our website or give me a call. If you’re interested in a short sale and are wondering if it’s the best option for you, fill out the Short or Stay Calculator. It’ll give you a detailed report on whether or not it’s a good business decision for you to complete a short sale.

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