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Barrister
Barrister, Lawyer
Category: Real Estate Law
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Experience:  16 years real estate, Realtor. Landlord 26 years
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My girlfriend has a condo she bought in 2009 or 10, (whichever

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My girlfriend has a condo she bought in 2009 or 10, (whichever year doesn't qualify for Obama's plan), that she paid $160k for, and an identical unit in her complex just went short sale for $120k.

She has recently set about fixing her finances as she has been slowly sinking. She has asked Chase for a mortgage modification and been declined, which I expected because they have all been paid on time, she's gone into debt in other areas to keep up with the house.

Is the first step in a short sale or mortgage modification to stop making payments to motivate them more? Or is there some type of short sales specialist she can consult. I think ideally she'd like to hold onto the property, but not under the current terms.
Hello and welcome! My name is XXXXX XXXXX I will try my level best to help with your situation or get you to someone who can.
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Is the first step in a short sale or mortgage modification to stop making payments to motivate them more?
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You are completely correct in that as long as the payments are current, she won't get any help from the lender. They simply don't care if someone is struggling to make their payments, as long as they are making them.
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So yes, you have to get their attention and the only way to do that is to stop making payments as that is the only thing they understand. Typically they won't consider making any type of loan mod or refinance option available for 60-90 days after payments are stopped.
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With that said, it will kill her credit to do so, but if that isn't a concern, then that may be the only thing that she can do to get their attention and possibly get a loan mod. There is no legal obligation for a lender to offer a loan mod and they can decide to foreclose instead, so this would be a risk. Keeping that in mind, it would be a good idea for her to sock away the mortgage payment somewhere safe and not spend it in case they decide to take a hard line and move to foreclose. Then she would have a good amount that could be used to cure most of any default and reinstate the loan.
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Thanks
Barrister
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