Short sale...Seller has to ask???????????
Received a response to a post with these statements:
1. "Seller must qualify for short sale..."
2. "....demonstrate financial hardship..."
3. "...inability to cure the default...'
4. "...comply with mortgagee's app process..."
5. "...the Seller must request for short sale consideration"
I assume #1 is validated by #2 & 3, but my main question is about 4&5. Is there an applicaiton process for a short sale that the seller has to comply with, and must the seller request it?
I'm confused. Sounds like everyone else just gets permission from the seller and goes to it!!
Thanks,
Joe
There are rules for every game, and it's important to both know, and play by the rules.
Consistency knows no shortcuts.
Nothing personal shortsalepro, but that reply was of absolutely no help. Thanks for the philosophy though!! Sounded a lot like a sales pitch.
I was actually hoping someone would give some insight into whether 4 & 5 were true or not. Granted different lenders play by different rules, but are these statements rules that people have run across?
Thanks,
Joe, 1 thru 5 were my quotes. I responded to your question posted on another board.
Sorry it sounded like a sales pitch. In 20 years I've facilitated hundreds upon hundreds of preforeclosure &/or short sales, and was instrumental in helping to establish some of the loss mitigation practices still used by mortgage loan servicers today.
Sales pitch? No. Preachy? Maybe.
Without the Seller's cooperation from initial application to closing, your only alternative would be to purchase the
mortgage (hopefully at a discount) then complete the foreclosure yourself.
Shortsalespro,
I humbly bow in deference to your experience, and I apologize for throwing your quotes back at you!!!:o)
I do understand that you have to have the seller on your side, and that they have to be in dire financial straits (or at least telling the lender that they are).
My only confusion was that it sounded like there was an application process that the seller had to go through to request short sale consideration. As mentioned earlier, I knew the REI has to have written permission from the seller to get the information on the loan, title, insurance etc…. from the lender, but wasn’t sure if the seller had to ask the lender if they could have approval for the REI to try and short sale. I may be talking in circles and if so I apologize!!!!
Thanks for your insight and advice, they do not go unappreciated!!
Joe
The request for short sale consideration must (directly or indirectly) come from the Homeowner/Mortgagor. They must sign the application. They must provide their financials (tax returns, paystubs, bank statements, financial statement, letter of hardship, etc.).
It is the Homeowner/Mortgagor who is granted relief in the form of short sale consideration. It is the Homeowner/Mortgagor who may incur an exposure to income tax liability resulting from forgiven debt. It is the Homeowner/Mortgagor who may be asked to agree to an unsecured Note to pay the difference between the mortgagee's net recovery and the outstanding balance.
It is the Homeowner/Mortgagee that must agree with the terms of the Short Sale Approval.
The Investor can and often helps expedite the application process by helping to complete the forms, and furnish the requested documentation (listing agreement, contract for sale, estimated HUD 1 settlement statement, Buyer's prequalification statement, etc.)The Investor also may prepare a Proposal in support of the short sale request.
Joe, May you be blessed with having had this Seller Qualification of Distress, in order to work a short sale, emphasized at this stage. The Seller must not be able to Afford the home; not just "Not Want" it. ( moving out of state/want to have more money to spend/you asking for a reduction on your home mortgage, etc.)
Without the context, I'm going to venture that all five comments may be reinerating the same truth;
1. "Seller must qualify for the short sale"= financially, not qualify to maintain the mortgage on their home- "must qualify" comes in when you send your SS package to lender including varying degrees of proof ( w-2's, bank account statements, paystubs, tax returns-according to how hard the bank wants to look, these will definitely demonstrate to them financial hardship or not, but the home owner's personal hardship must be added by you, as well, to help make their case; divorce, sickness, just got another job, so-can't catch up, etc.
The Home Owner is in Default, right ? Their file can't be in the collections dept of the bank. It has to have been sent to Loss Mitigation !
2."demonstrate financial hardship"- you got it, just remember this is Key !! I add this to my first contact list, along with weather or not they are in default, to substantiate- because it will have to be later and why would I wait to know if it will fly with the lender ?
3."Inability to cure the default"- " I'm filing bankruptcy, it's my only hope, with ALL this OTHER burden I HAVE."
4. "Comply with the mortgage app process"- which will ask for documentation, above, more or less, for them to consider closely, many times by commitee. So, of the components of a short sale package to the bank ( app process ) , this is ( 1 2 3 4 & 5 ) all one= demonstrate financial hardship. Go about it however you can, to go to bat for the home owner, so you can make a deal and get paid, for same.
5. "The seller must request for Short Sale consideration" - The consideration the home owner is asking for will be in the form of the handwritten Hardship Letter that you submit along with rest of the information you send the bank. " I've suffered hardship, please give me and my situation gracious consideration." You will first, of course, get a release from the home owner, to get to contact their lender, and this is where YOU request the banks "Application Process". You will contact the lender and give them a little spill about the home owners mistreatment by the world, ( The FIRST bank I called, I was talking a little bit and the banker was like, " So, what are you asking me ?, if we will take Short ?" - Answer, ="yes". so, you may just want to get to asking them for their hardship package pretty quick, after telling them the home owners down on their luck and saying the homes got too much owed on it to make sense to you, but you're tring to help) they most of the time, ( some lien holders wont) will have a Short Sale- Hardship Package, meaning a list of items they'd like for you to retreive and fax back to them. Some of these things which involve financial hardship are what have been mentioned and which you will also Suppliment-( Overdrawn statements, repossession of car receit, medical bills, job loss etc.,etc., in addition to, the physical distress of the property you'll be supplimenting, right ?)
So, this, I believe, will get you to the "Get's permission and goes for it"; -AFTER, you guessed it, establishing for youself, that the home owner is in financial-hardship-distress. Their Distress must be able to be reasonably demonstrated to someone looking at it very closely, although, the bank WILL temper the home owners distress with their own position of distress ( a non-performing asset = liability) where they may be willing to have some latitude.
That is where your job and the money comes in.
Remember, your "sales pitch" holds the negociating posture of "relative certainty", compared to the home owners and the banks positions of "relative uncertainty".
Alan
Joe, May you be blessed with having had this Seller Qualification of Distress, in order to work a short sale, emphasized at this stage. The Seller must not be able to Afford the home; not just "Not Want" it. ( moving out of state/want to have more money to spend/you asking for a reduction on your home mortgage, etc.)
Without the context, I'm going to venture that all five comments may be reinerating the same truth;
1. "Seller must qualify for the short sale"= financially, not qualify to maintain the mortgage on their home- "must qualify" comes in when you send your SS package to lender including varying degrees of proof ( w-2's, bank account statements, paystubs, tax returns-according to how hard the bank wants to look, these will definitely demonstrate to them financial hardship or not, but the home owner's personal hardship must be added by you, as well, to help make their case; divorce, sickness, just got another job, so-can't catch up, etc.
The Home Owner is in Default, right ? Their file can't be in the collections dept of the bank. It has to have been sent to Loss Mitigation !
2."demonstrate financial hardship"- you got it, just remember this is Key !! I add this to my first contact list, along with weather or not they are in default, to substantiate- because it will have to be later and why would I wait to know if it will fly with the lender ?
3."Inability to cure the default"- " I'm filing bankruptcy, it's my only hope, with ALL this OTHER burden I HAVE."
4. "Comply with the mortgage app process"- which will ask for documentation, above, more or less, for them to consider closely, many times by commitee. So, of the components of a short sale package to the bank ( app process ) , this is ( 1 2 3 4 & 5 ) all one= demonstrate financial hardship. Go about it however you can, to go to bat for the home owner, so you can make a deal and get paid, for same.
5. "The seller must request for Short Sale consideration" - The consideration the home owner is asking for will be in the form of the handwritten Hardship Letter that you submit along with rest of the information you send the bank. " I've suffered hardship, please give me and my situation gracious consideration." You will first, of course, get a release from the home owner, to get to contact their lender, and this is where YOU request the banks "Application Process". You will contact the lender and give them a little spill about the home owners mistreatment by the world, ( The FIRST bank I called, I was talking a little bit and the banker was like, " So, what are you asking me ?, if we will take Short ?" - Answer, ="yes". so, you may just want to get to asking them for their hardship package pretty quick, after telling them the home owners down on their luck and saying the homes got too much owed on it to make sense to you, but you're tring to help) they most of the time, ( some lien holders wont) will have a Short Sale- Hardship Package, meaning a list of items they'd like for you to retreive and fax back to them. Some of these things which involve financial hardship are what have been mentioned and which you will also Suppliment-( Overdrawn statements, repossession of car receit, medical bills, job loss etc.,etc., in addition to, the physical distress of the property you'll be supplimenting, right ?)
So, this, I believe, will get you to the "Get's permission and goes for it"; -AFTER, you guessed it, establishing for youself, that the home owner is in financial-hardship-distress. Their Distress must be able to be reasonably demonstrated to someone looking at it very closely, although, the bank WILL temper the home owners distress with their own position of distress ( a non-performing asset = liability) where they may be willing to have some latitude.
That is where your job and the money comes in.
Remember, your "sales pitch" holds the negociating posture of "relative certainty", compared to the home owners and the banks positions of "relative uncertainty".
Alan