Dealing With Delinquency

Sharing the loss.

Lenders may ask the seller to agree to pay a cash contribution in turn for their approval of the short sale. This is because your lender is taking a loss on the funds you owe to them. Depending upon your financial circumstances, they may consider it fair for you to share that loss.

Only if you can afford it.

If you don’t have the ability to pay (e.g. funds in bank accounts, stocks, etc.) your lender is unlikely to even ask for a cash contribution. Most people who have come to the point that they are considering a short sale have exhausted their cash reserves, so won’t be asked to contribute.

A small price to pay.

Making a cash contribution might seem unfair for people who are already struggling financially. However, it is a small price to pay for getting out of a mortgage obligation. (Another way to think of it is just giving back a couple of your missed mortgage payments).