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The Banks Role In Determining The Path To A Short Sale
What do banks look for when they review the information on a loss mitigation request? (Step 1 in a short sale)
Most banks require the owner to provide 2 years of tax returns, two current months of bank statements and 2 recent pay stubs along with a complete financial statement and a hardship letter just to start with. They have their departments also reverify employment or unemployment dates. All of that is then compared to the time frame of the slow or non payment records. If all of these things match up and there is verification of a life changing event then in the majority of the cases a Lender will begin discussing with the owner a work out that may include a short sale. If there is for any reason a signal that the income loss is temporary then a loan modification or forbearance is the Lenders first choice.
After all of this is completed the banks then want to have an idea of the true market value of a house and will order a drive by BPO to see what the fair market value of the property should be if the house is for sale. From there they will make a decision ... more

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