Although every lender has its own rules, a lender will generally approve a short sale request, if all of the following conditions are met:
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The price requested by the owner for the short sale must be fair and represent the true market value of the property. The lender will verify the market value by obtaining its own appraisal of the property, often referred to as a broker price opinion (BPO). In other words, although lenders do not want to foreclose a homeowner's property, they also will not take much less than the property is worth.
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The owner must not have the financial means to pay the balance of the mortgage. The mere fact that a property owner is behind in mortgage payments and that the property value is worth less than the mortgage owed, is not sufficient for a lender to agree to a short sale. The lender will need proof that the owner does not have the financial ability to pay the shortfall. If an owner has the means to pay the shortfall, the short sale will not be approved. A hardship letter and financial statement, as well as supporting financial information such as tax returns, pay stubs, W-2's and bank statements will all be required.
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Fully executed contract of sale showing a ready, willing and able buyer. The lender will not approve a short sale request unless the owner already has a buyer ready to purchase. The lender will also require a copy of the listing agreement with the real estate agent.
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None of the proceeds from the sale can go to the seller. If the owner wants to be able to sell the house without paying the lender in full, then the lender will not allow the buyer to receive any proceeds at closing.
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Proposed HUD Settlement Statement. The lender will want to see exactly how much it will net from the proposed short sale before it agrees to the short sale request. Your attorney will prepare a preliminary HUD closing statement and include it in the package being sent to the lender. The lender will want to see that all of the closing costs are reasonable and that nobody is getting any funds that could be going toward the mortgage.
If you are in a situation that is preventing you from meeting your monthly mortgage obligation we'd like a chance to speak with you about your options. Peter and Laura Testa are licensed Real Estate Agents who have been successfully handling Short Sale transactions for over 4 years. With a 100% success rate we are happy to lend our expertise- FREE OF CHARGE- to qualifying homeowners faced with financial hardship. To learn more about the short sale process please contact Peter or Laura Testa at 203-442-3873. Do not let valuable time slip by while you continue to default on your payments. Call us today.
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