I never answer that question because I can't give legal advice. I suppose the sellers' rationale is the lender will be more agreeable to accepting a short sale if the sellers stop making their mortgage payments and the mortgage goes into default. Sometimes that is the case and sometimes it's not, but the thing is there's not a surefire way to find out without stopping the mortgage payments.
Some sellers I know stopped making payments on their second mortgage years ago. For those underwater sellers, they realized that the second has no equity and therefore would not spend the money to foreclose.
It's not always smart to stop paying on the mortgage. There are advantages to keeping your mortgage payments current. One advantage is on a short sale, if the owners are current and move more than 600 miles away, they might be able to apply for an FHA loan to buy another house. There are also advantages to not making mortgage payments . . . read more about whether you should Stop Making Mortgage Payments.
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As of this writing, Elizabeth Weintraub is a Broker-Associate, DRE #00697006, at Lyon Real Estate in Sacramento, California.
Comments
I think you should always pay your mortgage if you can.