While many lenders will have varying requirements and may demand that a borrower submit different types of documentation, the following should be treated as a guideline of what is required in a pursuing a short sale.
Contact Your Lender Immediately:
You need to make the effort to find the right person responsible for handling a potential short sale. You want to talk to person in charge of loss mitigation for the lender, you want a supervisor's name, the name of the individual capable of making these kinds of decisions.
Submit a Letter of Authorization:
Your lenders will not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, Title Company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. You should include the following information: name, address, loan number, third party agents involved and contact information on both the agents and yourself.
A Preliminary Estimate of Your Lenders Proceeds:
A preliminary HUD-1 settlement statement that indicates the sales price you are under contract for and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your third party agent (realtor, title company or lawyer) should be able to prepare this for you. The bottom line should not indicate any net proceed to the seller.
Your Circumstances, In The Form of a Hardship Letter:
A complete description of the facts that brought you to financially challenging situation and why you have a valid reason for the lender to accept less than full payment. Lenders can understand many circumstances are unavoidable, loss of job, death, divorce, etc., but they are not very compassionate to situations involving dishonesty, misrepresentation or criminal (or criminally negligent) behavior.
A Complete Financial Statement:
Be truthful about your current financial situation and disclose your assets and liabilities. Provide information on savings accounts, money market accounts, stocks or bonds, cash, real estate or anything of tangible value. Your lender will need to be assured that you cannot pay back any shortfall in the short sale transaction.
Proof of Valuation:
Many homeowners caught by the current downturn of the real estate market have lost significant equity in their home. This should be part and parcel as to why you cannot sell your home for enough to pay off the existing lien. You need to substantiate this value to the lender through a proof of valuation. In declining value to the lender you could present a fully completed appraisal, a comparative market analysis (CMA) or a broker’s opinion of value.
Your Purchase Agreement and Listing Agreement:
The lender should want a copy of the executed offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to allow payment of certain items such as home protection plans or seller concessions inspections.
If your package is complete, the facts are accurate and the circumstances speak for themselves, the lender will approve your short sale. Within the ongoing communications and negotiations, you should ask that the lender not report any adverse credit references to the credit reporting agencies, although they would be under no obligation to accommodate this request.
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4392 Cloudmont Drive
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This beautiful home listing for a large, 4-bedroom, 2.5-bathroom house on 2.1 acres with a lake view. The house has many features, including a high...
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Charming Solid Brick Ranch-style residence bursting with curb appeal set on a spacious .29 acre lot bordered by quiet green space. This inviting ho...
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212 Tuscany Court
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The Ivy is a two-story, single-family home featuring a formal dining room as you enter, which then opens to the great room and kitchen creating a f...
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Welcome home to St. John's Lake, Nestled Between Main Road and River Road, and Close to the Limehouse bridge. The community will feature a secluded...
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Great new home ready for move in June/July 2024. This home is located off the Vaughn Ed Kee Pkwy, homesite backs up to protected wetlands and wetla...
219 Camber Road
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Indulge in the epitome of coastal elegance with this impeccably crafted 2900 square foot custom Structures home, offering a sanctuary that harmoniz...
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Nestled within the desirable Crowfield Plantation community, this charming single-level home offers an ideal blend of comfort and convenience. The ...
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Enjoy all the conveniences of ranch-style living in the single-story Beech home. Enter this inviting and spacious front entry with guest and second...
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Welcome to 102 Ashton Dr, a lovely 2-story home in the centrally located non-HOA community of Devon Forest! This home offers 4 bedrooms, 2.5 bathro...
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Enjoy this comfortable two bedroom, two bathroom located in Turtle Cove! This is a an original owner villa that has been well maintained and cared ...
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Welcome to this beautifully renovated single-story home in West Ashley's established Melrose community! Sitting on a spacious lot, this move-in rea...
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