What is Involved in Applying for a Short Sale
Posted By admin on June 24, 2009
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If you feel that you qualify for a short sale contact the loss and mitigation department for your lender. Once you contact the lender’s loss and mitigation department ask for a short sale package. Most lender have financial forms that the lender needs filled out. In order for the short sale to be successful, the home must be listed. Contact a Realtor that is skilled with working with short sales.
A complete package consist of:
- financial documents from the seller/owner. I am sure, as a seller/owner you may be wondering what is included in the financial documents. The items are:
1. W-2 or 1099
2. pay stubs
3. lender financial documents (This document is a written verison of above information ie listing of income, name, address, phone number, etc)
4. authorization letter (allows the Realtor to speak to lender on your behalf)
5. hardship letter from seller/owner (this letter will explain why the seller/owner got behind on payment of mortgage)
- listing agreement with brokerage
- purchase agreement
1. purchase agreement must have proof of funds whether it is a pre-approval letter from a lender or proof of cash to purchase the property
- HUD-1 The HUD-1 is a settlement statement that itemizes all the charges for both the buyer and the seller. This documents gives the lender an overview of funds needed to sell the property.
Armed with the above information, the lender makes a decision on the offer that the buyer submitted. Remember a short sale allows the seller/owner to avoid foreclosure. The short sale also is often less than what the seller/owner owes to the lender. It also allows the lender to prevent holding cost, attorney fees, etc. Holding cost for the lender is preservation of the asset or home until there is a buyer. To preserve the home, the lender must secure the home from theft, keep the plumbing from freezing and bursting, etc.
Originally posted 2008-12-21 11:14:05. Republished by Blog Post Promoter
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