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I recently tried to get a loan modification so I could reduce the interest rate on my loan and it was denied. A month after the bank denied the loan mod, they called me to collect a loan payment. I have never missed a payment...in fact I've made every payment early. It turns out they put my house in a short sale program without my consent. Will this affect my credit rating and can I take legal action against the bank for enrolling me in a short sale program without consent.

adonis · Posted: Mon Nov 09, 2009 12:13 am Post subject:

Welcome dk,

In case of a loan modification, it's not mandatory that you should default on your mortgage payments. Many a times lenders modify loans when you are current on your mortgage payments.

As far as short sale is concerned, the lender should have informed you about it. Without your consent, he cannot place your property for a short sale. It will definitely affect your credit score by 75-100 points. Moreover, you would be responsible for paying the balance amount resulting from the sale of the property. As far as legal action is concerned, it would be totally your discretion.

gmakerley · Posted: Tue Nov 10, 2009 12:15 pm Post subject:

dk, this is a most peculiar thing you've mentioned. you need to engage the assistance of a real estate attorney, in my opinion, to get to the bottom of this. there is no way that a lender can decree a short sale without your knowledge. short sales are usually the other way around - you requesting it of them, not like this.

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Short sale without consent