Short Sales are Very Common right Now, So be Prepared to gather a list of Info required by the Banks.
 |
A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes. See also deed in lieu (or foreclosure).
Most banks have a list to go by, and these are some of the Items they will require,
- Personnel Hardship Letter - What type of Hardship are you going through? Death, Unemployment, Divorce, Ect..
- 3rd Party Signed Disclosure - They will need this to discuss any part of your Loan with any outside 3rd Party.
- Financial Worksheet- They will supply you with a Financial worksheet, and all whom are on the Mortgage must fill this out. Be aware this is pretty Detailed.
- 1 Month Pay-stubs, and /or Tax Returns - The banks are going to Require you to give this info for Consideration of a short Sale, if you can't provide a tax Return, then you will have to show proof that you filed an Extension. Also any parties on the Mortgage Need to give their Income Documents.
- 1 Month Copy of your Bank Statements -This is Required on all of your Bank Accounts, Savings, Checking, Trusts, Ect...
- Copy of a Sales Contract, if you have one - This needs to be signed by your Mortgage Holder, and your Buyer. The Buyer cannot be a Family Member, and the bank will verify.
- Preliminary Hud 1 -The Hud 1 must show all of the costs in detail broken down, even though it's most likely Projected figures. Usually there is a 5% Cap on Realtors Fees.
Now there is a Deed in Lieu of Foreclosure.
deed in lieu (of foreclosure)
A means of escaping an overly burdensome mortgage. If a homeowner can't make the mortgage payments and can't find a buyer for the house, many lenders will accept ownership of the property in place of the money owed on the mortgage. Even if the lender won't agree to accept the property, the homeowner can prepare a quitclaim deed that unilaterally transfers the homeowner's property rights to the lender.
- All of the above will be Required plus- You must have the property Listed, or at least show Good Faith in trying to sell the property. There cannot be any 2nd or 3rd Liens on the property, or attached to sthe home.
- Bankruptcy Release Letter - If you filed Bankruptcy, then you will need a Release from the Courts.
- Short Sales and Deed In Lieu of Foreclosures- Will take 4-6 Weeks to Process and can still be denied by the Mortgage Company.
If you are trying to sell a Short Sale, keep in mind that the bank is looking for someone who can't sell their home, and have legitimate Issues that are keeping them from making their Payments on their Home.
Keep in mind. If you sell a home in short sale, the 2nd and 3rd Mortgages will most likely not get paid off, so be prepared to deal with those Lenders, or Collection Agencies. The banks are going to ask about any money you may have, and what you spend on Groceries, and clothing, So expect the Banks as Creditors to ask a Million Questions.
Seek out an Attorney, or a Realtor that Specializes in Short Sales, and they will Guide you in the right Direction.
Thomas R. Weiss
Licensed Mortgage Consultant
Office-561-968-6683
Cellular-561-310-0315
Comments(13)