Short Sale Documents

For those who will negotiate with a lender to begin a short sale, the first step is to determine the equity position of the homeowner. Be prepared with this information:

- Is the seller in bankruptcy? (The court and bankruptcy trustee must agree to the sale).
- Current loan balance, type of loan, interest rate, impound account information, and other loan details.
- Past due amounts.
- Has a Notice of Default (NOD) or Notice of Trustee's Sale been recorded?
- Other liens, judgments and taxes.

To begin discussions with the lender's loss Mitigation Department (which may also be called the Foreclosure, Short Sale, Loan Modification or Reinstatement Department), have these documents handy:

- If agent, "Authorization to Release Information" signed by borrower.
- Hardship letter from the homeowner explaining why mortgage payments are not being made.
- Copies of borrower's most recent bank statement, pay stubs, income tax statements (usually two most recent of each statement are required).
- Broker Price Opionion (BPO) letter.
- Net sheet showing all expenses and what the letter will net at close of escrow.
- Preliminary report/title commitment from a title company.
- Listing Agreement.
- Marketing plan for the home.

After written confirmation of the lender's acceptance has been received, these items will be required:

- Signed copy of complete sales contract.
- Copy of buyer's loan application.
- Copy of buyer's deposit and receipt from escrow.
- Updated HUD/settlement statement.
- Updated preliminary report/title commitment, if applicable.