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Can I list my home for sale after applying for a loan modification?

Mortgage Loan Modification Answer:

by Loan Modification Expert - Dan North

Yes you can list your home for sale after applying for a Loan Modification. Your home can be listed for sale before applying to modify your mortgage but you should tell your lender that you have the home listed.

You should not try to hide listing your home if asked as your lender will find out anyway. You are not required to notify your lender if you list after you apply for hardship loan modification but in most cases they will know about it once you do list.

If You Need To Short Sell

If you have equity in your home it does not matter if you list your home for sale, except you will have to make it very clear you want to keep your home and modify the mortgage. You will have to clearly state selling is worst case scenario and only an action of last resort if loan modification can not be arranged.

If your mortgage is upside down, you will have to short sell the home at a price bellow the unpaid principal balance of your mortgage, so will have to go through your lenders HAFA (Home Affordable Foreclosure Alternative) program to arrange that.

Usually lenders will not modify a loan and process a short sale arrangement at the same time, they will want you to do one or the other. The two processes typically are handled separately in different departments.

You can try to sell at full price while trying to modify your loan. Lenders will usually want you to make a good faith effort to sell at the full amount of the loan balance before they will short sell so you can fulfill that obligation while trying to modify.

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