Sample Cover Letter - Short Sale Proposal
A lot of people (including myself) on this site have been interested in a Short Sale Cover Letter. Although I have seen many requests for a cover letter, I haven't found a sample provided by anyone. So, I created my own. Using tidbits found on this site about what should be on the cover letter, I put my own together.
So far I have only used it once, and it worked. After faxing the cover letter along with the rest of my proposal package every day for a week, the lender sent a request to the property owner for the additional items they needed (w2's, bank statements, etc). The ball was rolling. Once the lender got the items, they forwarded the package to a negotiator. Today the negotiator ordered the BPO internal value. They had done a drive-by value before. Once the BPO comes back I'll know if I have a deal, but either way , I think my cover letter did it's job. It got their attention and got my proposal moving.
I'm going to share my cover letter with everyone. Really it isn't a letter. I used an outline format. I encourage everyone to change it and make it their own. There isn't just one format that will work. If we all just copy exactly what someone else is doing, it seems to me like a form of inbreeding. You have nothing new to share with me if you're using exactly what I'm using.
If someone has a more proven cover letter that they are having success with and would like to share some suggestions for my cover letter, please do so.
Jamie
Sample Cover Letter:
I. PROPERTY INFORMATION
Owner’s Names – John and Jane Doe
Address – 100 Main St, Cleveland OH 44100
Loan # - 00000000000
II. BUYER’S INFORMATION
Name – Bobby Buyer
Address - 200 Main St, Cleveland OH 44100
Phone: 216-555-1234
Fax: 216-555-1235
Email: Bobby Buyer @ email com
III. INTENT
Bobby Buyer, buyer, intends to purchase property in Section I above from John and Jane Doe, owner. This purchase will be contingent upon TooShort Mortgage Company approving a short payoff amount for the loan in Section I above.
IV. REASONS FOR SHORT SALE APPROVAL
Condition of house – This house is disrepair and is not livable. This house requires $37,650 in repairs to bring it up to code. Major repair items include: Faulty roof, broken windows, rotten back porch roof, water damage, etc. See attached repairs estimate and photos.
Financial Hardship of Owner – John and Jane are not able to afford repairs and are not able to rent or sell property due to its current disrepair. John and Jane can no longer afford to pay on this loan. They are facing foreclosure and/or bankruptcy. See attached letter.
V. OFFER
Purchase price to be paid by Bobby Buyer is $10,000.00 . See attached Purchase Agreement and estimated Hud1 form.
VI. CLOSING DATE
Closing date for this purchase is scheduled for 12/31/03.
VII. REQUESTED ACTION FOR LOSS MITIGATION DEPARTMENT
BPO – Immediately place order to have Broker’s Price Opinion (BPO) completed. Buyer will be the point-of-contact for Broker to gain access into the house.
Specify Additional Requirements - Provide buyer with a list of any additional documents/items that are required in order to approve this short sale.
Thank you in advance for your help to get this defaulted loan off your books and allow John and Jane to get out of this unfortunate situation and finally get a good night’s sleep.
Sincerely,
Bobby Buyer
LIST OF ATTACHMENTS (2 pages each)
1. Letter from John and Jane
2. Repairs estimate
3. Photos
4. Purchase Agreement
5. Estimated Hud1 form
6. Authorization To Release Information
[addsig]
Sample Cover Letter to Loss Mitigation Department
(Should put on your letterhead)
You can send this via fax
DATE
Wells Fargo Bank
Attn: Loss Mitigation Representative
Re: Loan #99999
Dear Mr. Smith:
As you know Frank and Betty Hood own the property located at 123 N.W. 15 Court, Phoenix, AZ 85060 and are facing foreclosure. I am interested in buying their house, but they owe far more than the property is worth in its’ present condition. Their attorney is advising them to file bankruptcy, but they don’t want to drag this on any longer. They wish to sell the house to me, save their credit from foreclosure and save you the hassle of having to complete the foreclosure process, and simply get on with their lives.
After much consideration and due diligence, I am willing to purchase the property from them. However, because of its poor condition I cannot offer market value. The property needs a lot of work to bring it up to current market standards. I’ve called a local Realtor® and asked for the current market values and have based my offer accordingly keeping in mind the necessary repairs. I can provide you with a BPO upon your request.
Based on the area comps, you can see that Frank & Betty now owe Wells Fargo Bank far more than their property is worth. My offer is $88,000 cash as payment in full inclusive of all fees, taxes, etc. I am prepared to close in 30 days. However, this offer is contingent on Wells Fargo Bank waiving any deficiency judgment against Frank and Betty Hood concerning the shortage.
Attached is the authorization to release, contract for purchase, net sheet, photos of the property, contractor’s estimate of repairs, comparable sales in the area, a hardship letter, written by the Hoods and my proof of funds letter. Please review the attached documents and respond at your earliest convenience. We urge you to accept our proposal and move for a quick closing on this property.
Thank you for your cooperation. I look forward to working with you to help the Frank and Betty.
Sincerely,
Jon Doe
These are great letters. Thanks. When I come up with one I will post.
Dave,
When you say cash in full with closing in 30 days...do you really mean you have the cashola or are you getting a loan? Also, what is a net sheet, I've seen that referred to a lot.
Thanks in advance,
P
Fine examples. Not unlike an Executive Summary. However, there is a difference between a Short Sale Proposal, and a simple request that a short sale application be sent to the mortgagor.
The formal Proposal should accompany the completed application.
There is no need for a cover letter to request that an application for short sale consideration be sent to the mortgagor.
You don't have to present your case or any other information with the initial request that an application be sent to the mortgagor. In fact, unless/until a file is stated by the designated loss mitigation representative, whatever you submit prematurely will just become clutter in a computerized environment.
KISS.