Short Sale

Asked over 2 years ago - Springfield, VA

My husband and I lost the renters on our second home and now cannot afford to pay the mortgage. We are forced to go forward with a short sale since foreclosure is not an option, we want to take less hit with the credit damages. The bank that holds our mortgage also is the bank that we have our savings account. If we do sort sale, can the bank collect the savings since they are holders of this account as well? Should I move the savings money to a different bank? We were saving these money for our kids' college. Thank you!!!

Additional information

This bank also holds our line of credit which was a part of the 80/20 loan

Attorney answers (1)

  1. Michael S ('Mike') Hagen

    Pro

    Contributor Level 13

    Answered . Although I am unsure where the second home is located, here in FL I would recommend that you carefully read your mortgage and note to see if your lender has the right to "grab" money from your savings account in order to pay an unpaid mortgage payment. Many borrowers are understandably concerned about a scenario such as yours and often will close their savings account and move it to a bank unconnected with their mortgage, even if the mortgage bestows no such collection right to the lender.

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