It is not always an easy process to do a short sale. We are here to help you make it a smooth process.
In a short sale, the lender allows a property to be sold for less than the amount owed on the mortgage and takes a loss. The borrower’s credit rating may be hurt in a short sale, but for less time than in a foreclosure.
Each potential short sale is reviewed on a case by case basis. At this time, short sales are only being considered the borrower’s primary residence.
The approval of a Short Sale in a specific case can only be discussed between the homeowner, seller, or their agent and the lender.
Steps to Receiving Approval for a Short Sale.
1- The borrower or their authorized Agent must contact lender.
2 – The lender explains the Short Sale process and requests needed documentation that must be faxed to begin the process.
The borrower must show hardship, documented with a hardship letter.
The loan must be delinquent (or the borrower must supply documented eminent hardship).
3- The borrower or their Agent must fax the required documentation to the Short Sale Department.
***Minimum required documents to start the short sale process:
Signed Purchase Contract
Listing agreement
Preliminary HUD-1
4- Within a few days of the lenders receipt of the faxed documents, the Short Sale Department orders the interior appraisal and provides the Agent with a confirmation of receipt.
5- Within an additional 3-5 days of the lender’s receipt of the faxed documents, an appraiser will be assigned. The appraiser contacts the borrower or their Agent to schedule an appointment to conduct the appraisal.
6-Approximately 10 to 15 days after the appraisal is ordered, the Appraiser provides the results of the appraisal to the lender.
7- Upon receipt of the appraisal, the lender will conduct an analysis to determine if the Short Sale Offer is aligned with Market Value.
Note:
As the Short Sale Department is making the assessment of Market Value, some items may be negotiated:
Purchase price
Requesting changes to the HUD-1
Participation from the borrower via cash and/or Promissory Note
Request for the borrower to sign a deficiency letter
Any combination of the above
8- In order to determine the potential of the negotiated items above, the lender may require additional information to be submitted which may include, but is not limited to:
Explanation of hardship
Most recent month’s income verification (or P&L statements for the last 3 months, if self-employed)
Most recent month’s bank statements
Most recent year’s tax returns
9- Once all parties (including additional lien holders) have agreed to the negotiation, the lender and/or its investors/insurers will render a decision within 5 business days.
10- The lender will communicate the decision to accept or decline the short sale to the borrower and/or their Agent within 48 hours of the decision.
