March 2, 2011
Short Sales Colchester CT
As homes prices have continued to fall, some homeowners are finding that the selling price is not enough to pay off the mortgage loan. For most people, this means they will have to live in their present house a few more years until there is equity in the house.
People that are being transferred, getting a divorced or can’t keep up the payments, waiting is not an option. The holder of the mortgage has the right to block the sale if the homeowners cannot pay off the loan when it is sold.
When a house is sold without equity, it is called a Short Sale. There is a lot of legal, financial and tax ramifications associated with a short sale and we recommend that you consult with a lawyer and an accountant if you are faced with this situation. Most people that require a short sale don’t want a lawyer; they just want to sell their house. A Realtor can help you sell your house and help your through the short sale process. He or she will ask you to sign an Authorization To Release (ATR) information form that will allow them to work directly with the lender and start to put together a “Package” for the lender.
Most lenders’ website will provide a list of documents that must be included in the Package they must have from the home owner before approving a Short Sale. These include at least these 5 items and maybe more:
1. Hardship Letter
2. Financial Statement
3. Tax statement for the last 2 years
4. Last 2 pay stubs
5. Last 3 bank statements
Not sending in this information until an offer is in hand can hold up the approval for months. All other liens on the house (Tax Lien, Mechanic’s Lien, etc) must be resolved before the lender will approve a short sale. Once a price has been agreed upon by the buyer and seller, it is submitted to the lender. At that point, they can approve, deny or make a counter offer. It usually takes them a while to make up their mind, but when they do, the sale can move forward.
Making a short sale isn’t easy, but with the patience, persistence and attention to detail it can be done.