A very common misconception in the short sale world is that you must be behind on your payments to be considered for a short sale. This isn’t necessarily the case as I have assisted homeowners with short sales that were current on their payments. The key factor is are you facing a financial difficulty. If you can show the bank (your lien holder) that you have a legitimate hardship (loss of job, loss of income, change in financial circumstance, death of a spouse, medical hardship, divorce etc.) and that you no longer want to keep the home you may be able to complete a short sale while current on your payments.
From the bank’s perspective, the homeowners who are delinquent have the most immediate need to receive their assistance. In addition, if you are able to continue making your payments they may request a cash contribution or promissory note from you at the closing of the short sale in order to approve the short sale. Your lender will consider your entire financial situation when making this determination.
There is an exception. If you have an FHA loan on your home and you want to do a short sale you will be required to be 31 or more days delinquent at the closingof the short sale. You do not have to be delinquent at the time you apply to the FHA Pre-Foreclosure Sale Program.
Working with an knowlegable short sale listing agent is key.