Utah Short Sales: Should you stop making your mortgage payments during a short sale?

Bountiful UTAH – Many people think that in order to be eligible for a short sale you must stop paying your lender. That is not true.


Many lenders will approve a short sale, even if you are current on your payments. They will consider a short sale based on another hardship, such as a job transfer, job loss, negative equity position, or if you foresee that you won’t be able to make the payments in the near future. Should you stop making your payments? I am not a lawyer, and therefore cannot give legal advice.

I can tell you my opinion. It all comes down to what is most important to you. If reducing damage to your credit rating is important, then continue paying for as long as possible.  Continue paying your lender until the sale closes. Halfway into the short sale negotiations, the lender may tell you that they will not process the short sale until you are late on the payments. At that point you can make the decision to continue or stop making payments.


There are some reasons to stop paying your lender during a short sale.
1. You are tight on money. Yes, you will suffer additional credit damage. But, the benefit of using that money for other bills may outweigh the credit damage.


2. You are concerned about a deficiency judgment or promissory note. Many lenders will ask you for a promissory note if they think you have the extra money. If you want to reduce that likelihood, then you can decide to stop paying. That decision comes with all the side effects such as credit damage and other problems. Many people also say that is unethical. (I am not going to comment on that. One could make the argument both ways. Every person has to decide what is best for them and make their own personal choices.)


Disadvantages of not making your mortgage payment.
1. Credit Damage. You will suffer more damage to your credit. That credit damage should go away in 2-3 years. In addition, some people use a dispute strategy to get the derogatory marks removed much faster. Some get them removed in 6 months.

The point of this article is that contrary to public opinion, you do not have to stop paying your lender in order to short sale your home. You can minimize the credit damage by continuing to pay until the short sale closes. I am not a lawyer or an accountant, and therefore cannot give legal or tax advice.

Are you interested in selling your property as a Short Sale? Call me at (801) 651-0707 for a FREE consultation. When you call, I will explain how the process works in detail and answer any questions you may have. Discover how other sellers successfully completed a short sale and request a free consultation by

Thinking about a LOAN MODIFICATION? Our FREE Utah Loan Modification Kit has the instructions you will need to get a loan modification approved with your bank. Email us at utahhomesaver@gmail.com to get yours today.

Thanks for reading this, Dave Forsberg.

Dave is a Realtor at Prudential Utah Real Estate - Bountiful.

Phone: (801) 651-0707 

Email: utahhomesaver@gmail.com.

Dave Forsberg and The Utah Home Saver Team specialize in helping Davis County, Utah Homeowners short sale and never pay the bank another penny. Bountiful Loan Modification Help, Bountiful Short Sales. Bountiful Short Sale Realtor. Bountiful Realtors. Bountiful Realty. Bountiful Realtor. North Salt Lake Short Sales. Woods Cross Short Sale Realtor. Centerville Short Sales. Farmington Short Sale Realtor. Fruit Heights Short Sales. Kaysville Short Sales Realtor. Layton Short Sales. Layton Short Sales Realtors. Syracuse Short Sales. Clearfield Short Sales Realtor. Davis County Utah Realtor.