Short Sale Negotiation Disclosure
EnTitle Settlement Services is not new to short sale negotiations, in fact, Helen Cornwell, with EnTitle Settlement Services, has over twenty years of experience in dealing with short sales. Even so, if there is one rule that holds true, it is that the approval process for short sales is a constantly moving and evolving process. Every investor has its own set of guidelines and timelines. In most circumstances, the lender with whom you call for questions is only the servicer and not the investor.
Depending upon your lender, there may be varying levels of participation required on your part, as the borrower. We will be certain to advise you of what you need to do in order to obtain short sale approval. Following is a list of documents which will be required to submit to the lender for consideration.
- 2 months most recent paystubs, for all borrowers
- 2 months most recent bank statements, for all accounts
- 2009 tax returns
- 2010 tax returns
- Hardship letter and request outlining the reason for the short sale
- Copy of Listing Agreement
- Copy of Sales Contract
- Current Financial Statement *
- 3rd Party Authorization
Please note, some lenders provide their own financial statements which they will require to be completed. A few lenders will require your participation online and some via telephone. Additionally, some lenders have other forms which they will provide which will need to be signed, such as “Arm’s Length Transaction” addendums. In the event there are additional requirements, we will advise you or your agent of the specific requirement and provide the documents, if necessary.
It is important to note that there are various levels of short sale approvals. The type of approval the bank will be willing to offer depends in large part on your hardship and your financial status. Increasingly, lenders are agreeing to release the lien on the property in order to allow the property to sell, but not necessarily releasing the debt. Although short sales and foreclosures do negatively impact credit standings, new FNMA and Freddie Mac guidelines reduce that impact on those who cooperate with the lender in a short sale, Deed in Lieu, or Loan Modification. Lenders are making it clear that they will begin going after those who just “walk away” from their loan obligations resulting in a foreclosure.
EnTitle Settlement Services in no way guarantees approval of the short sale or the terms under which the lender will be willing to release the lien. Our part in the negotiation process is to act as the liaison between you, the borrower, the real estate agent, the lender, and the purchaser. Also, it is important to realize that every lender has different timelines in which they work to approve the short sale. Some lenders are currently taking between 4-6 months on the approval process. Please be aware of this going into this process. While we have obtained approvals in as little as 2 weeks, the typical time frame from submission to approval and closing is 2-5 months. There are many variables which influence the approval process and time, including HAFA, HAMP, FNMA, Freddie Mac, FHA, and individual investor requirements or participation in the above reference programs.
The service we provide is above and beyond that of a typical sale transaction and requires many hours and hours of time and follow-up. Our fees for negotiating a short sale are $1,695.00. This fee is paid at closing and typically covered by the lender as approved fees deducted from the proceeds of the sale. Any fees which the lender does not agree to pay are typically charged to the purchaser. If the property does not close or goes to foreclosure, there are no fees due.
What fees might you be expected to pay at closing? We are seeing that increasingly, lenders are not willing to cover the costs of Home Owner or Condo Association fees or dues. Please try to keep any HOA or Condo fees/dues current.
Upon receipt of a short sale approval letter, we recommend consulting with a tax accountant and/or attorney for a complete understanding of the ramifications and consequences of the approval letter.
At any time, should you have any questions or concerns, please don’t hesitate to call our office. In the mean time, we recommend you, buckle up, hold your head back, and hold on tight, we may be in for quite a ride.
Mortgage Assistance Relief Services Disclosure
The following disclosure is made pursuant to the Federal Trade Commission’s MARS Rule (16 C.F.R. §322 et seq.).
IMPORTANT NOTICE
You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us $1,695.00 in additional settlement charges, as outlined on our Short Sale Negotiation Disclosure, for our extended services.
EnTitle Settlement Services is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
If you stop paying your mortgage, you could lose your home and damage your credit rating.