Putting Together The Short Sale Package
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by: BobMassey
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Word Count: 601
1.) A hardship letter from the homeowner outlining what is causing missed payments and what the homeowner has done to try to change the situation.
The letter should start with a brief identification of the property, the loan number and a sincere apology for the situation.
Next, have the homeowner explain in detail what led to the missed mortgage payments. Were there expensive medical costs? Did the homeowner lose their job? Perhaps they retired, which reduced their monthly income significantly. Did they have an adjustable rate loan that adjusted up? Did the home end up over-leveraged? Was the homeowner forced to move to to a job transfer, and the house is sitting unsold? These are all examples of acceptable hardships that should be detailed in the hardship letter that is sent to the Loss Mitigation Department of the Lender.
The homeowner should also include an explanation of all of the steps they have taken to make good on their obligations. They might have taken a new job or greatly reduced their discretionary spending.
2.) Every member of the household who is contributing to the household income should include their last two pay stubs. This is including, but not limited to, commissions from the last few months, child support payments, alimony checks, and annuity payments.
3). If the homeowner is a business owner, they should also send a balance sheet and a profit and loss statement to the Bank.
4.) The bank also needs the last two months' banks statements to get an idea of what your spending habits are like. Homeowners with lots of credit card debt might be able to get a debt counselor to work with the Lenders in order to lower the payments of perhaps forgive some of the debts altogether.
5.) The homeowner's tax returns from the last two years. This will provide the Bank with a clear picture of the homeowners' ability to pay their debts and their overall financial stability. The lender can also see from these all assets that the homeowner might have in case they decide to foreclose and pursue a deficiency judgment on the homeowner.
6.) Banks also require a realistic budget from the homeowner. If the budget is around $300 above or below even in an average month, the homeowner might be able to adjust their budget so that they keep their house
7.) The bank will also want to see a listing agreement with an asking price. The listing should include the agents normal commission as well as standard closing costs. In almost every case, Lenders will pay closing costs and commissions to agents if they approve a Short Sale.
8.) Your offer. You should also provide the bank with your power of attorney that gives you the ability to negotiate with the bank and list the property with a real estate agent on the owner's behalf. If you don't have the documents, you won't be able to do these types of deals.
9.) Power of Attorney. You must have an authorization form giving you or your negotiator permission to talk to the Lender. This is actually the first document that you should obtain from the homeowner so that you can obtain any special instructions from the Lender before the Short Sale package is submitted.
Just collect these documents and you are well on your way to getting a short sale done!
About the Author
Looking to find out more about short sale investing? Then visit www.REWealthCoach.com to find the best advice on how to do a short sale and how they can change your life!
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