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Short Sale Packet
What can you expect when submitting a short sale packet?
Certified Mitigation wants to make sure you are educated about the short sale process. So, what they have done is provided you with a quick list of the necessary documentation the bank is going to need in order to proceed with your short sale. Each person/entity onthe loan(s) must provide copies of the following information. If you are married and either party is not on the loan, the bank will still require both parties to provide the following information and sign the sales and purchase agreement as they have an interest in the property*. The list below will outline the documentation, forms and other information your lender will require:
Hardship letter: The hardship letter needs to establish a financial hardship. This letter should be truthfully written and outline the various reasons as to why you are experiencing
the hardship.
Borrower’s Financial Form: This form helps to establish a detailed accounting of your financial situation. The bank uses this form to assess your current financial status to confirm the details of your hardship letter and ultimately determine whether or not you will qualify for a short sale.
(Freddie Mac form 1126 will be provided to you from Preventable Foreclosure.)
Credit Report: The credit report provides the best source of information as it will list all your creditors, balances owed, minimum monthly payments and status of the current payment history. If, for some reason, you are unable to supply a credit report, make sure to make a copy of all your monthly bills including credit cards, car payments, student loans, child support, etc. This will clearly help to demonstrate your financial hardship to the lender.
Lender Information/Mortgage Statements: You must provide a copy of your mortgage statements (one for each loan/heloc, etc.) as Certified Mitigation will need the account numbers in order to speak with your lender and submit a complete short sale packet.
Tax Returns: Most lenders require that the last two year’s tax returns are included in the short sale packet. (Not just the W-2’s). If you haven’t filed the previous tax returns, make sure to provide a copy of your extensions and reflect the reasons why you didn’t file in your hardship letter.
If you are self-employed you must provide P & L / YTD Income Statement and the last four (4) Months Personal and Business Bank Statements. For a Non-Owner Occupied/ Rentals, rental income with copies of rental agreement and mortgage statements for both the primary and rental property(s) must be provided.
If the Homeowner doesn’t have Bank Statements, the Homeowner must be able to Verify Deposits of Rent Received.
Bank Statements: The lender(s) require(s) that you submit the last (2) two bank statements, (some lenders require the last (3) three months). Make sure you provide statements for your checking, savings, and any other asset accounts such as a 401- K or investment account(s). 401-K, pension and investment accounts are required to show the income, scah flow and assets of the borrower. Also, if income is obtained from Social Security, disability or retirement sources, they should be documented as well. If you are having trouble providing statements, then provide the latest statement you have.
Pay Stubs: Each homeowner needs to provide (30) thirty days pay stubs. If you can’t prove your income due to job loss or another hardship, this needs to be reflected in the hardship letter.
Lender/Legal Correspondence: Provide copies of any previous documentation you have received from your attorney/lender/or the foreclosure attorneys. If you are unable to provide this information, please provide a brief explanation as to why you can’t provide any of this.
Property Tax Statement: This is a form you should receive that establishes the amount of property tax you paid the previous year.
Homeowners/Condos Association Statement(if applicable): This will help inform Certified Mitigation of any back due fee’s due. Certified Mitigation will help you with any discrepancies, however they cannot guarantee the fee’s will be waived.
Listing Agreement: The bank needs to see a copy of the listing agreement to know the property has indeed been listed.
Comps from the agent: Your real estate agent must provide at least (3) three comparable homes that sold in the area to help establish a value for the bank.
List of Repairs: When your agent walks your home, make sure to inform the agent of any known repairs. This list must accompany the documentation in the short sale packet during the initial submission.
For any questions you have regarding the required lender documentation, contact our team for a quick response!
We highly recommends that you contact legal counsel who is familiar with your state law and/or an accountant for the best advice as we are not, nor do we claim to be, a legal entity or accounting expert.
916-786-SOLD (7653)