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
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.
As the Short Sale Department is making the assessment of Market Value, some items may be negotiated:
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.