Short Sale SellersCan PMI Ruin a Short Sale Offer?
PMI isn’t really talked about in the short sale arena too often, surprisingly. This one little thing, could actually turn a short sale upside down. Why?
Even when getting an accepted offer on a short sale home by the lender(s), PMI’s can come back saying they won’t ok the deal unless the sellers signs a promissory note, payable as a no-interest loan.
Is this action considered ok by the PMIs? Yep, they can do it – PMI’s word rules. At this point, a seller will need to decide if their credit is worth the amount of money demanded by PMI. Unless they report the loan, paid in full, as agreed, the drop in seller’s credit score will effect the seller for at least 2 years.
Consult an attorney and have them examine your loan for origination fraud, predatory loan characteristics or TILA violations to challenge the validity of the loan and its foreclosure. Your attorney could also review the option of bankruptcy and the discharge of debt.