Can my mortgage company foreclose during my short sale?

The answer is yes, they can start foreclosure, but why would they do it?  This is normally a situation where one hand doesn’t know what the other is doing. The bank/ mortgage company/mortgage servicer can start a foreclosure proceeding at any time once the homeowner goes into default.  Normally, a homeowner starts the short sale process once they have already defaulted, so the foreclosure process can begin at any time.  But what is the benefit to the bank?  Why would they spend more money foreclosing when the property is going to be sold for less than what is owed on the loan?  It seems illogical that they would spend more money trying to foreclose while another department of their organization is entertaining short sale offers.  This is a great question and there is no simple answer.

It’s possible that one hand doesn’t know what the other is doing.  It’s also possible that they will be reimbursed for all of their out of pocket costs by a third party who has guaranteed the loan?  More to come….

DELLUTRI LAW GROUP
CARMEN DELLUTRI, ESQ.
KMarshall@DellutriLawGroup.com
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Phone: 239.939.0900
Fax: 239.939.0588
1436 Royal Palm Square Boulevard
Fort Myers, Florida 33919