If you're here on Step Two: Short Sale Package, you've probably already determined that a short sale is your best option and have read How to List Your Home for a Short Sale: Step One.
Step Two: Short Sale Package generally consists of documentation required by your lender(s). After initiating the conversation be prepared to put together as much, or more, information as was required when you initially received your loan. Create a short sale file so that all documentation is in one place.
Most lender(s) require a hardship letter. As outlined in How to List your Home for a Short Sale: Step One, this will involve determining exactly why you are in the circumstance you're in, why it is most likely that this will not change, why you cannot make the monthly payments at the current rate, why you cannot modify your loan, how your circumstances are continuing to deteriorate, what you have done to try and stop the tumble, etc. A short sale is your attempt at staving off a foreclosure and allows the lender(s) to recoup some of their loss.
Financial documentation consisting of income tax returns from the previous two years. If you've done your taxes yourself, be sure that all receipts, income and expense information, addenda, attachments, explanations are together. Contact your accountant or tax preparer to be sure that you have copies of all items that provided the background for the tax returns. In general, during the short sale process, the bank will require hard copies or faxes and not until much later in the process will they accept emailed information.
Put together bank statements for the previous six months before your request for the short sale. The lender may or may not require copies of the actual checks and expenses. If you pay bills on a cash or cashier's check basis, proof of payments must be provided. You must provide information on any and all household or business accounts. With our Hilton Head Island rental properties, be sure to have all expenses relative to taxes, insurance, maintenance, fees, etc.
Make copies of all proof of income, including investment accounts, savings accounts, IRA's, etc. Most lenders will want an illustration of any and all income. Any income from outside rentals must also be provided. In our Hilton Head Island area, many sellers have investment properties and must show that income from short term rentals.
Finally, your documentation should be nearly complete. All that is needed is Step Three: Finding a Realtor to list your property for Short Sale.
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