What Do You Need for a Short Sale?
If you’re in financial trouble and can’t make your mortgage payment, foreclosure may not be your only option. Before you get to the point of foreclosure, try talking with your lender about the possibility of a short sale.
First, what is a short sale? It’s when the home is worth less than what is owed through a loan (or loans) so even if you sold it, you’d come up short the payoff. In certain situations, lenders may be willing to waive that difference. But they won’t gladly discharge the amount … you’ll have to prove you’re deserving.
The attorney that spoke at my office today told about one family who was trying to get qualified for a short-sale. They had to produce two years of tax returns, bank statements for the past six months, and a personal loss and profit statement - along with the ever-important hardship letter. The couple was turned down because four months prior, the family had taken a trip to Disney World and spent $4,000. The lender felt if they could afford a vacation to Disney, then surely they could afford to make a house payment.
So what is hardship? Read my post from late September to get a fairly long list of what qualifies.
A short sale is not a fast, easy fix. It’s a long daunting process in which the seller must be patient. As the speaker said today, “Short Sales are the Wild West.” I prefer having a sheriff in town, but sometimes you have no choice. Good luck.
