Question:
“My bank turned me down for a loan modification. Does that mean they’ll probably turn me down for a short sale too?”
Answer:
Good news. The answer is “no.”
Short sales and loan modifications are handled by two separate departments at the bank. Their criteria for approval are different.
Yes, both generally require some financial hardship. But there are big differences.
You must have sufficient income to get a loan “mod.” Banks don’t do “mods” to be nice. They do them to decrease the likelihood that they’ll have to foreclose. And many loan modifications are denied because they calculate that the borrower will not be able to make even the new lower payment.
Loan mods are also rejected due to missing paperwork and lender error.
None of these that occur on a loan mod will stop you from getting approval on a short sale.
