Tuesday, October 20, 2009

What goes into a Short-Sale package?

1. Hardship letter: the purpose of this letter is to tell the lender your “story” of why you have missed payments and why you cannot continue to pay. It should be handwritten and come from the heart.

2. Financial disclosure: Like a loan application, except you are not applying for a loan…you are showing the lender that you cannot afford the loan that you have, because your expenses are greater than your income.

3. Copy of purchase contract. Most banks will not talk to you without an offer on your property.

4. Proof of income for past 2 pay periods.

5. Copies of last 2 bank statements.

6. Copies of last 2 years complete tax returns with
W-2’s and 1099’s.

7. HUD 1 prepared by a title company showing the cost of closing, estimated expenses and net to bank.

Most banks will not speak to a borrower about a short sale unless they are behind in mortgage payments and have a contract on their home. Submitting a short-sale package does not guarantee the bank will agree to accept a short pay-off.