Mother & Daughter Blog: Short Sale Approvals: Wiliness, Procedures, Attitude, Customer Service Varies - bottomline... it is still better for the borrower

The majority of the bank/lenders have pre-determined criteria for submitting a short sale.  I am still not convenience that they all have pre-determined criteria for short sale approval.  Most are willing to entertain a short sale approval or at least will take the time to make it seem that the file is being reviewed ** some take months!

However, there is still a large number of foreclosures still going on and a great deal of those properties were short sale listed prior to foreclosure - had offers into the bank/lender and did not get an approval or in some case not even a sign of negotiation

Here is some of the information that I believe most banks/lenders have in common:

• Require the borrower to be in HARDSHIP LETTER and to submit it in writing (see Hardship Sample Letter:  
• Require a Financial Statement, Income Statement, W2s, Current paycheck stubs, some will ask for last year's income tax statement, retirement information, bank accounts (it varies what they will ask for).
• They all require a signed by borrower and buyer offer
• They will need a Short Sale package from the agent to include all the items that they tell the agent they need
• Short Sale - incurs a smaller financial less than foreclosure or non-payment of mortgage
• Short Sale is typically faster, less expensive than a foreclosure
• Most bank/lenders have a loss mitigation/foreclosure department
• Majority of the bank/lenders will not take the listing agent evaluation and will get their own (either an Appraisal or Broker Price Opinion (BPO)
• Times are changing and short sales can be approved even if the loan is not in default (but most will not entertain if there no obvious hardship) ** please note: Hardship must be true information
• Most are willing to entertain a short sale approval or at least will take the time to make it seem that the file is being reviewed ** some take months!  Agent must be aggressive about requesting that Trustee Sales date be postpond if it is approaching because bank/lender will not automatically do it - they will just let it go to the sale
• Bank approved short sale does not guarantee acceptance!  ** EVERYTHING must be in writing.  Without a written agreement .... you have nothing
• First Lien holder does not have the power to approve a junior lien  ** agent must negotiate with both lienholders (all lienholders)
• Regardless of the bank/lender if a short sale is approved and completed, it will remain on the borrower's credit for seven (7) years
• When bank/lenders approve short sale it allows the borrowers to feel good that they made a decision to be brave and request the short sale instead of just leaving the property.  In the long run.. it will be better for the borrower.
• There is no uniform Short Sale package -- it all depends on the individual bank/lender requirements

Still and all... no bank is the same and really no negotiator within the same bank/lender is the same!  Do not anticipate what a bank will or will not do --- be like Nike and JUST DO IT and see!

 

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