Short Sale Approval-Make it Work!!!

It is obvious, most agents are not that well versed in the approval process.

An agent must understand the philosophy of the deal. Why should a bank employee who has 250 plus cases to work each day, take your case and MAKE IT WORK? You must call each Monday and make it a priority to get your clients case in front of Asset Managers who have the authority to approve the deal. Who has this authority? Usually just a privilaged few, in fact less than five employees out of 300 have over $500,000 credit authority that can approve your deal at any bank. The Negotiator, or Workout Specialist typically only recommends approval, once an entire package is received. If you send less than the required documentation, you are wasting time and sometimes that may equal foreclosure action by the bank.

Ask to speak with someone who has the authority to extend the sale, and you will most likely speak to their assistant until it is time to pay some money. Lenders are requiring the cost of appraisal to be paid up-front so we all have a vested interest in closing the deal.

Lenders that approve short sales are open to negotiations when it comes to reporting 1099 and credit information, mostly because they want their money, and will use whatever negotiation tactics that are necessary to get that point accross to the real estate community, and Short Sale industry accross the world.

Think about why this deal makes sense to the bank. If you were the investor/Asset Manager, why does it make sense to take less than what is owed.

A few other things to consider:

Purchase Money vs. Non-Purchase Money

Purchase Money Loans are used to Purchase the subject property, and have never been refinanced into other debt. (credit cards, home equity line, consumption of other credit via your home)

Non-Purchase Money Loans have been used to pay off current mortgages or taken cash out for debt restructure or home improvements, or whatever, but the original debt was retired with this loan.

Lenders review the financial probability and possibility of repayment from the borrower who has a Non-Purchase Money Loan. The Non-Purchase Loan borrowers only, have a financial responsibility to re-pay any deficiency balance owed, even in trustee States. Seek Legal advice if you have any questions whether you may owe any deficiency money owed by the bank AFTER the property has been sold via a Short Sale.   The bank must also disclose this in any new demand faxed over to title.

Ask Doug