How To Make Your Payments And Still Qualify For A Duplex Short Sale

duplex paymentsStarting November 1, underwater duplex owners who are not behind on their mortgages may qualify for a short sale if their loan is with Fannie Mae or Freddie Mac.

Prior to this change in policy, only duplex sellers who had missed mortgage payments could qualify.

Remember, while you may make your payments out to a lender like Wells Fargo or Citimortgage, they may only be the servicer for the loan. Loan servicers are a bit like property managers, except they collect money and pay bills for investors who are ultimately, who you really owe the money to.

To be eligible, duplex owners will still need to demonstrate a hardship in order to qualify for a short sale. Those hardships may now also include unemployment of the death of a spouse.

The downside of this otherwise good news is, as of now, the short sale would report to the credit bureau as if the duplex seller had been behind on mortgage payments.  This could drop a duplex owners credit score anywhere from 150 to 175 points.

Officials at the Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie, acknowledge there’s a problem with this. FHFA initiated discussions with the three national credit bureaus to come up with a possible solution.

To find out if your loan is with Fannie Mae or Freddie Mac, click here.