What to Expect when Doing a Short Sale

by Bonnie Aletaha on February 26, 2012

Too many hurting home owners are behind with their mortgage and they have no clue how to handle it. Their loan provider promises they wish to assist these individuals in performing a mortgage loan modification, yet they purposefully follow the property foreclosure process. These days, numerous property owners are learning that they are refused a mortgage loan modification when there’s a home foreclosure sale time approximately ten days away. From this time, these upset property owners are struggling with often going through with the property foreclosure or, they are considering the choice of completing a short sale.

Many property owners don’t even know what is a short sale, let alone the best way to start one and then use it in order to save their house from foreclosure. A short sale occurs when the homeowner wants to sell their residence, nevertheless they owe more to their mortgage company than their home may be valued at. Any determination to short sale is tough and the first thing a home-owner ought to do is reach out to a strong knowledgeable short sale listing agent. Not necessarily all real estate agents handle short sales, and many just get one or perhaps two per year and therefore are not able to close them. It is vital that a property owner choose an agent who has a number of short sales under their belt and therefore are alert to existing loan provider guidelines, such as HAFA short sale.

Once the home is posted available for sale, the homeowner will need to provide their realtor with financial paperwork. This particular documentation needs to include a hardship letter, financial statement, present proof of income, current bank statements as well as the last two years of federal tax returns. If the homeowner is trying to qualify for HAFA they will need to fill out a Request for Modification (typically referred to as an RMA), Frank Dodd Certification as well as a 4506-T.

The agent will submit the financial paperwork together with the purchase agreement to the lender to get their review. The first thing the lender does is ask for an interior evaluation on the residence. This is far more generally called a BPO which is short for Broker Price Opinion. This specific valuation helps the mortgage lender decide if the purchase offer is consistent with fair market value.

A short sale isn’t always a bargain. The mortgage company will only accept offers which are within 15% in relation to what precisely they determine to be the fair market value. As soon as this specific value is back in, the lending company will take close to 30 – 45 days to evaluate the file and approve.

Learn more about what is a short sale. Stop by Socal Short Sale’s site where you can find out all about short sale and what it can do for you.

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