Looking to Sell Yourself Short
Posted by 
Al Filippone on Monday, June 8, 2009
How you can increase the chances of success in obtaining approval for a short sale
If you find yourself in the unenviable position of having a monthly mortgage payment that is higher than you can afford, a short sale may unfortunately be your best option. The following steps will increase your chances of your bank’s approval.
Begin by acquiring a short sale package: The short sale package contains documents that need to be appropriately completed and returned to the Lender. Although this package can be obtained online, a short sale information search should not be limited to the internet. You can get one from your Lender, and having an individual to communicate with during the process saves time in the long run. (It is also a good idea to have the name and telephone number of the supervisor in the department.)
Write a hardship letter: A document in which you give reasons to the bank as to why you cannot pay the difference between the purchase price and the amount owed to the Lender. It includes an explanation of why you have or will soon stop making mortgage payments. Understand that the hardship boils down to a sudden unavoidable loss of income or a sudden unavoidable increase in expenses.
Keep the hardship letter focused: The Lender gets dozens, perhaps hundreds, of such letters on a continuous basis. The letter should be clear and concise, without reciting all of life’s unhappy events. It should reflect the situation of a rational and reliable person who has encountered unavoidable events making it impossible to meet your financial demands.
Do not blame the Lender for the hardship: It gets in the way of a favorable response to a request for approval.
Account for your spending record: A Lender will typically reject a short sale request from a Seller who has recently purchased large-ticket, discretionary items on a credit card.
Compose a good cover letter: One that briefly lists all of the information in the package, spells out the essential dates that you are trying to meet and outlines your objectives. This letter is the first thing the Loss Mitigator sees. It can be very helpful in expediting package approval.
Support the reasoning for selecting a particular price: When your Lender evaluates your property to determine/approve a proposed selling price for your home, the Listing Realtor should be present to explain the problems that are specific to the property and the reasons for the pricing. The Broker’s Price Opinion will be a key factor in the presentation aimed at getting approval of a short sale.
Although the prospect of a short sale is unattractive and unsettling for anyone, it is a better option than foreclosure which effects your credit and borrowing power for years to come.
*Excerpts from the article, “Everything You Ever Wanted to Know About Short Sales but Were Afraid to Ask.” Written By Attorney Sharon Jones, Westport , Ct.
