I have a short sale selling homeowner who finds himself an involuntary guest of the state. Looks like he may be there for the foreseeable future, likely to be years not months. He has a conventional FNMA mortgage (and a second mortgage), both with First Franklin.
I anticipate and can handle the logistic complications of getting docs signed, etc. but wonder if anyone has had a similar experience with a locked up-seller. What, if any, impact would that key fact have on the short sale approval criteria?
Any thoughts?
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Your short sale criteria will remain the same. There is true hardship here, there is no income :) Unless he has other tangible assets or bank account you shouldn't have any problems. Get him to sign all documents upfront, disclosures, releases, etc. to reduce trips to meet him. If he has no other assests have him put it in his hardship letter. Just make sure that you allow additional time for closing when the time comes because of the "signature" issue. Most jails have internet access, I wonder if electronic signatures could be done here. Is this client the only one on the mortgage? Or is there a spouse?
That sounds like about what I would expect. My sense is the lender should be able to understand quickly there is zero abilty to get a "contribution" or promissory note from the seller. I'm guessing it's just a matter of demonstrating that the net from the offer exceeds any likely proceeds from a foreclosure auction. Thanks for the quick feedback.