I was just wondering once you receive an approval on a short sale if you share the approval letter with the other party?  Is it okay to share the letter with the sellers personal information with the other party to the transaction?

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Johanna....general mortgage industry standards require all pages of a document be provided.  Only providing one page is not going to be sufficient. 

Since the lender is the one giving the money, they defintely not only have a right to it, but also a fiduciary responsibility to ensure it complies with all guidelines of the buyer's loan program.

It looks as if all the contracts are similar across the states.  Written notice from seller to buyer.  Term sheet (updated HUD).  I still don't see where anyone providing the actual letter is required or where anyone would be able to defend their actions legally if called to do so.  I see a lot of "I think" and "we do" but everything I have posted here I have learned from attending many classes led by one of the top real estate SS litigators in Arizona and our broker.  If you're not sure -- please ask someone with the legal experience to help keep you out of trouble.  I hope I've helped at least one person in this thread.  Best to all! 

If you are getting written permission from your clients to give the approval letter to the buyers agent, lender and title company I dont see where anyone would have a problem.  It is simple, easy and keeps everyone happy and the deal moving forward.  As agents we should never do anything without approval from the parties involved.

Written consent cannot come from the seller themselves or a form the listing agent puts together.  Written consent for the short sale would be something from the lender who is taking a short payoff.   

As a matter of practice I don't share the letter with anyone other than Title and buyers loan officer. I send buyers agent the acceptance notice as required by our SS short sale addendum. I stipulate to title and buyers lender that they are. It to distribute the letter to the buyer or agent, however, if the agent wants to see the letter they are welcome to share it while in the office visually.

If I am pressed and the agent demands to see the letter after I cite the SS addendum clause, then I have a written approval executed by the seller to release. This is still considered confidential information and the seller owns the letter not any other party. However, if they do allow, I will black out anything that could be confidential such as account numbers or last 4 of social. There had been incidences in the past where buyers actually took the information and called the lender whe terms were not conducive to buyers to "confirm". Huge huge issue of course. Sad that I can no longer trust these things want get in the wrong hands.

I have personally never seen an approval with a sellers SSN.  A lot of the BofA approvals I have only have the last 4 of the account number.   A buyer can try all day to call the lender I do not think they will get to far without an authorization on file.     I still wish someone here could fill me in on what confidential info is on an approval that could harm the seller.   I do not give copies to a buyer but I will let them see the approval and I have not a seller yet have a problem with that.   Like I said , I can find more info on the seller by going to public records if indeed I want to pry.    For me and my sellers it is no big deal and it actually limits our liability.

Michele, I always share it. A buyer who waits 3 monhts for an approval deserves to see it as soon as I have it.  Anyway buyer's attorney will ask for a copy. I also only work with one buyer at a time and ask buyers to do inspection prior to bank approval. If there is a big problem they can reduce the price. The other way everybody would lose because buyer would back out. 

If the buyer is obtaining a mortgage, then the buyer's lender will have to have a copy of the final short sale approval letter.  Since the sales contract is written subject to the short sale acceptance, the underwriter has ot make sure all parts comply with the loan program guidelines.  In GA, I have never had any resistance in getting a copy of the letter.

I only share the approval with the buyer/ buyer's agent after editing confidential seller info out. (Usually the buyer's earnest money is not released and the inspection period does not begin until approval has been received.) Liens released, HOA payments, attorney and/or short sale negotiation fees are none of the buyer's business.

Curtis, it becomes the buyers business when they put earnest money up front and do inspections up front which more and more agencies are requiring.  Still, no one here has filled me in on the "confidential" info on an approval.

No party on the buyer's side of the transaction has the right to know any of the seller's personal financial information. This could include any HAFA funds they may be receiving, the amount of any local, state, or federal liens that may be paid, attorney fees or negotiation fees paid - all of which I have seen itemized on an approval letter. I consider all of this to be confidential seller information. The buyer has the right to know information pertaining to the property, not the property owner. (In Idaho, I have a statutory obligation to protect my client's information)
Curtis - my lender wanted the entire SS letter to be certain they were aware of any contingencies on the approval. Their underwriter wouldn't release funds until they were sure that proper arrangemetsto satisfy the SS approval contingencies were in place. Our lawyer and title company also needed this info to be assured there wouldn't be any issues related to release of the SS lien. Without seeing the entire letter, how can buyer's reps be sure there won't be any surprises at closing?

Seems to me this creates a fiduciary issue for buyer's reps ...
If I represented the seller in your situation, I would have communicated with, then sent the approval directly to the underwriter. Title always gets a copy as well. Your lawyer would have to make a compelling argument as to why he would not take the title company's word on the condition of title (we all have to rely on the title company's accuracy).

I am not dogmatic on any of these items, flexability is the key to the successful completion of a short sale. I do agressively look after my client's interests first and foremost. Please remember that if you ever decide to invest in Idaho.

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