Short Tips June 2011
Short sales continue to dominate our market with more and more homeowners facing the reality of owing more than their home is currently worth. Right now I am working with sellers on short sales with SunTrust, CitiMortgage, Bank of America, Chase and Wells Fargo. Overall, the processing of short sales seems to be taking less time from start to finish. Both Wells Fargo and Bank of America are using an on-line transaction management system/software to manage the short sale process.
The thing to remember is that no two short sales are exactly alike. There are many moving parts to a short sale and understanding how each piece impacts the deal is crucial to success. Here are some things to keep in mind when it comes to short sales.
1.) If you live in a condo or town home community, you must continue to pay your HOA dues. More and more lenders and investors are not willing to pay these expenses as part of the short sale. Further more, many HOAs have language that allows them to personally pursue you legally for back HOA dues. While some HOAs might take a settlement, getting a lender to pay them as part of the short sale might a huge roadblock in trying to navigate the short sale process.
2.) Have your financial documents in order and ready for your agent/attorney to submit to the lender. Many short sales drag out because these required documents are not submitted in a timely fashion or are not complete. All lenders have what are called gatekeepers that screen short sale requests for all required documents before the file actually moves along to the phase where someone that has authority to approve a short is actually assigned to your file. When lenders ask for 2 years of tax returns, make sure you have signed the signature pages. With most homeowners filing electronic tax returns, they never had to sign the signature pages. Every lender wants to see your signature on these documents. Also, when they ask for 2 months of back statements, be sure to include the most recent two months and include EVERY page even the blank ones. These statements are numbered and if page 8 of 8 is not included, that could delay moving along in the process.
3.) If you do not have one of the lender required documents for some reason, like a paystub because you are unemployed, provide a letter of explanation in place of why the requested document is missing.
These are just a few of the tips to follow when attempting a short sale. To learn more about the process of short sales, contact one of our short sale specialists today at 678-250-4500.