I got denied for a loan modification; can I do a short sale?
Many people are under the assumption that if they got denied for a loan modification that they will automatically be denied for a short sale. This is certainly not the case.
First of all, if you were denied for a loan modification because the bank or investor thought you could not qualify based on just your income and expenses, which is a clear indicator that you have a financial hardship which is one of the biggest factors for you getting approved to participate in a short sale. The bank/investor on your loan look at your entire financial picture when it comes to making a determination if you will qualify for a short sale, if they feel you are in a financial hardship and cannot continue to make your payments now or in the future, being denied for a loan mod may actually help get you a short sale approval faster.
Internally at the bank the will already have record that you tried for a loan mod, and will have knowledge of your financial picture, in some cases this could even speed up the short sale process. In some cases your single point of contact for the loan modification can also be the single point of contact for the short sale, making the process smoother and also this sits up an open line of communication for the short sale from the very beginning.
A loan modification is just the first stop in a number of potential loss mitigation options. Just because you have gotten denied, does not mean your house is going into foreclosure. In fact, in many cases the short sale is going to be your best option when it comes to a loss mitigation option if a loan modification does not work. My advice would just be that if you are looking to do a short sale, and have been denied for a loan mod, start the process and use a professional at the earliest possible. The longer you wait the less possible positive options you can have. If you need any more information or have any further question, reach out to me at any time!
So Just because you got denied for a loan mod, doesn’t mean your out of options!!