Expert: Sue Bernstein - 3/19/2008

Question
Hello,
My husband and I own a home in California which we lived in for 2 years, now, for the last 6 months we have been living in Oregon and rent out our California home for a lot less than our mortgage is. We are about to put our house back on the market and the realtor is going to do a shortsale as we can no longer afford this home that is worth about $70k less than our loan. IF we do a shortsale, is it true that we do not pay our mortgage during this. Our realtor stated to stop paying the mortgage, but doesn't that automatically put us in default for foreclosure? He is going to work with our bank to get the shortsale started. I just wanted to be sure that the information is accurate to stop paying the mortgage.
Any advice would be greatly appreciated!

Answer
Dear Donna,

I would call your mortgagor yourself and ask this question.  I believe you are correct in assuming that by not paying your mortgage you will go into default.  I would not stop paying until I had something in writing from the lender.

Hope this helps.

Sue Bernstein