Currently working a short sale with BOA. Negotiator wanted loan approval letter which has been provided. Now negotiator wants buyers; bank statements to show down payment money.  This has already been covered by the buyers mortage officer and the buyer is not willing to provide copies of bank statements to me and/or bank of america.  The buyer's down payment is 5% of purchase price which is covered in the loan approval letter.  I have been doing short sales successfully for a couple of years now and have never had a negotiator ask for proof of down payment for the buyer. Anyone have experience with this? 

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Suzanne, I have been seeing this happening more often. Bank Of America is not the only Short Sale lender requiring to see proof of funds. If the buyer wants this home, they will have to provide a statement showing they have the funds available. You will probably not receive an approval if they cannot show they have the funds to close. IF they are concerned about sharing their total balance in a bank account, they could always open another account and deposit enough money to cover costs. The only drawback is, most lenders want to see a "statement" and it will add time to your approval. I have also been running into Short Sale Lenders that require not only the bank information on the statement, but also a bank LOGO on the statement. Good Luck! [email protected]

Thanks for the response.  Unfortunately all this will do is run off more buyers from short sales.  I understand providing proof of funds if cash purchase, that is a given.  But providing personal information to their own mortgage company and then to another real estate agent and then the short sale lender might be a deal breaker for this one and that is unfortunate for our seller as they are doing everything they can do. Still seems a bit outside the scope of a short sale review and causes harm to the seller.

I understand completely. I know there are good Loan Officers and bad ones doing the PreQual letters. I lost a Short Sale buyer due to the fact their Lender did not check on the  necessary "Cash to Close". As it turns out, when they got to underwriting, the Cash to Close was not usable due to "seasoning issues". We are talking about $ 3,500. Even if the Short Sale Lender verified the funds, the buyer could not close due to their own lender's underwriting guidelines. 

I have lost 2 buyers recently due to Nationstar's Loan Application. They are requiring buyers to complete and submit a Nationstar Loan Application for the offer to be reviewed for Short Sale. Where is it going to end? 

I had this happen several times with BofA, including on a COOP short sale.  When I vet potential buyers/buyers agents for a short sale listing, I let them know there is a chance that not only will proof of funds be requested and pre-approval but that parts of their social security number may be requested also.  

I am surprised that you do not request pre-approval and proof of funds on all offers coming in.  It must be a regional thing.  Here in California, most agents request those items on EVERY offer, short sale or not.  Who wants to see an offer go sideways on something that was preventable at the beginning?  You don't want to find out too late that the buyer had no ACTUAL money and was counting on gift funds that never came through.

I had an agent once submit a pre-approval for a buyer from a mortgage broker stating the first time buyer was qualified for a state first time buyer loan program that had closed down due to lack of funds.  I had to call the mortgage broker and ask how he could qualify the buyer for a program that had no funds and was closed for over a year.  He started stammering and admitted that he did not know the program was no longer in effect!

If the buyer is going to be difficult, I would start getting back up offers.  Give the buyer a deadline / notice to perform (if your state has those forms)  If the buyer does not come through with the bank statement, hopefully you will be ready with your back up buyer to replace the current one.  It is my understanding that BofA will only give you 5 days to replace the buyer before you have to start the process all over again.  I have only had to replace a buyer a couple of times, quite a while ago, thank goodness.  I think this is because I prep the agents/buyers with many offer requirements before finally accepting the offer.

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