Homeowner wants to refi, but lender suggests a short sale — what to do?
Mortgage July 2nd, 2008Question: My first mortgage is an interest-only loan at 4.75% with a balance of $287,967, and a second mortgage with another lender. It is due to reset on March 31, 2009. I wanted to refi now before the loan adjusts, so I called the lender and submitted all the documents. After a few weeks, I was told a home retention workout on my loan has been denied because I cannot afford the monthly payments. The thing is, I have been making my payments for the past 48 months without once being late. I was advised to sell the house on a short sale. What is your advice? Also, should I do it now or wait until March? Christopher, Murrieta, Calif.
Answer: Your first issue is to try to get rid of your second mortgage. I don’t know of any lenders willing to redo a first mortgage while there’s another outstanding lien against the property.
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