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Banks grant short sales for two reasons: the seller has a hardship, and the seller owes more on the mortgage than the home is worth.

The seller will need to prepare a financial package for submission to the short sale bank. Each bank has its own guidelines, but the basic procedure is similar from bank to bank.

A few examples of a hardship are:
Unemployment / reduced income
Divorce
Medical emergency
Job transfer out of town
Bankruptcy
Death

The seller’s short sale package will most likely consist of:
Letter of authorization, which lets your agent speak to the bank.
HUD-1 or preliminary net sheet
Completed financial statement
Seller’s hardship letter
2 years of tax returns
2 years of W-2s
Recent payroll stubs
Last 2 months of bank statements
Comparative market analysis or list of recent comparable sales

Writing the Short Sale Offer and Submitting to the Bank

Before a buyer writes a short sale offer, a buyer should ask his or her agent for a list of comparable sales.

Banks are not in the business of giving away a home at rock-bottom pricing. The bank will want to receive somewhat close to market value.

The short sale price may have little bearing on market value and may, in fact, be priced below the comparable sales to encourage multiple offers.

After the seller accepts the offer, the listing agent will send the following items to the bank:
Listing agreement
Executed purchase offer
Buyer’s pre-approval or proof of funds letter and copy of earnest money check
Seller’s short sale package.

The Short Sale Process at the Bank

Buyers may wait a very long time to get a response from the bank. It is imperative for the listing agent to regularly call the bank and keep careful notes of the short sale process.

Buyers may get so tired of waiting for short sale approval that they may feel the need to threaten to cancel if they don’t get an answer within a specified time period.

That type of attitude is self-defeating and will not speed up the short sale process. If buyers are the type with little patience, perhaps a short sale is not for them.

Following is a typical short sale process at the bank:
Bank acknowledges receipt of the file.
A negotiator is assigned.
The bank orders a valuation of the property.
The file is sent for review or to the investor.
The bank may then request that all parties sign an Arms-Length Affidavit.
The bank issues a short sale approval letter.

Some short sales get approval in 3 weeks. Others can take as long as 12 months. A typical Short Sale transaction takes 4-6 months to complete.

Hello - Thank-you already to this community, as I recently fell apon your site, and this will be my first blog post here !

You can see my entire blog through my portal here !

Having been though this mess several times beginning n the late 2007's, it was pretty clear that we were in for the long hall. 

Now, why is it that most agents steer away from "short Sales"? And even still - How come the perception for the consumer is not there.....at least not in my area. 

My first Short Sale closing happened in 2008, with a property in Southbury, one town south of our home base of Woodbury, CT.

At that time, I must admit, I was not too up on what and how this thing was getting done. But knew the concept behind it all.

So as I leap forward to today with confidence to rally the consumer, and rally our fellow Realtor - to take advantage of this opportunity to help those that need it. 

It is truly amazing, how even today, if a consumer walks into a bank or home, for either a loan or to apply for a rental - and they don't meet there criteria - its ends there. 9 times out of 10. Our local bankers doing there job? Or should we look at each and every consumer and look to do what would be best for them. We can! And I do. As a Licensed NMLS Originator & Branch Manager, it is our duty to do so. 

Short Sale attempt day one - I head up to the home, spend a few hours cleaning and get picture and show ready. Look at the comps, and make an attempt to see just how and what Flag-star will require. So with some help from this community already, I have my Flagstar "guns a blazing" & ready to "get er done".

Understanding a short sale approval letter is a critical skill for a real estate agent, homeowner selling on a short sale, investor buying on a short sale, and anyone affected by a particular short sale transaction.

Most banks approving short sales are national.  This means they have loans in most states.  However, they often have legal council for the states they have loans in.  Because of this, often they will adjust their short sale approvals based on what works on the state were the property collateral to the loan is located.

This subject can get real technical.  That would be outside the scope of this blog post.  Lets focus on what the person selling on a short sale (homeowner) really want as first choice.  That is to not owe after the short sale. 

Just to not miss any components, there are three important concepts to understand.  Here I am simplifying to the maximum.

• Short Payoff:  The bank gets paid less than the total present value of the loan balance and releases its interest on the property.  So the property is no longer collateral.
• Release of Lien:  A type of short payoff in which, the shortfall between what is owed to the bank and obtained from the sale, is still owed by the homeowner.   Basically the homeowner still owes to the bank
• Short Sale:  A type of short payoff in which the homeowner does not owe anything to the bank after the property is sold. 

Needless to say, all homeowners want a short sale.  The question now is to know what is that the short sale letter actually means behind all that legalese wording.

How to Distinguish a Short Sale Approval Letter:

A short sale approval will always clearly state that the loan will be satisfied in full for less than the amount owed or very similar wording.  See sample below.

How to Distinguish a Release of Lien:

A release of lien letter will always indicate that the lien will be released but the debt will not be satisfied in full.  In addition, most likely, the homeowner will have to sign a promissory note at closing.

Oscar Morante
Ph:  971-222-3734
Fax: 866-844-7009
PDX Experts Real Estate, LLC
www.PDXExperts.com
534 SW 3rd Avenue
Suite 305
Portland, OR 97204

Real Estate Agent
Realtor

Bank of America Short Sale

Is your mortgage or mortgages held or serviced by Bank of America? Are you considering a short sale or do you have questions about the short sale process and how it affects your potential success of a short sale?

Bank of America has a few different short sale programs to help homeowners contemplating short selling their house. Plus, you may receive between $2,500 to $30,000 in short sale incentives, depending on your specific situation.

To find out details of Bank of America's Short Sale Incentive Programs <--- Just Click Here. Or call us and let's discuss your unique situation:

---------

Call Now: (888) 9-List-It.

That's (888) 954-7848.

While prices are rising in the Silicon Valley there are still homes that are underwater and you may need to short sale your South San Jose home. If this is the case, don't wait!

Bank of America has instituted some new policies which can have a major influence on your South San Jose short sale.

Co-operative Short Sales: Bank of America has a program where they will let you know ahead of time how much they are willing to accept for you South San Jose home in a short sale. Once you agreed to do the short sale they would put a hold on foreclosure activity and give you some money at close of escrow.

The new policy is that there will be no holds on foreclosure until the offer is fully accepted by Bank of America. What this means is that if you can not make your payments  on your South San Jose home and want to short sell you can not wait. You will not be allowed to stay in your home for months trying to modify your loan and trying to get a new job. Once the notice of default has been recorded you will have 3 months to get your South San Jose home sold as a short sale before the notice of trustee sale is recorded. At that point you have another 3 weeks before foreclosure on your South San Jose home.

As any real estate agent familar with south San Jose short sales knows, they take time for approval. Even a Bank of America co-operative short sale can take time. 4 months is not unheard of to obtain approval on a South San Jose Short Sale, so if you can not make your payments, do something or you could lose your home to foreclosure.

If you have any questions about Short Sales in Santa Clara or San Mateo County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

D.R.E. 01191194

650-619-9285

Whether you are dealing or have dealt with a short sale, foreclosure, BK, delinquency on your mortgage payments, or have a number of late payments elsewhere, your credit score is damaged and your finances are most likely in lockstep. However, recovering with bad credit will be difficult as interest rates inflate the cost of living and affect various other facets of your life and naturally you get caught in a downward spiral of poverty.

The best example of this is a home mortgage. Do not even consider pushing for another home without rebuilding your credit prior. The figures below will show you why.

The Ding Of A Delinquent Payment, Short Sale, Foreclosure, and/or Bankruptcy

Take a look at the impact of each situation on your FICO score. As you can see, regardless which consumer type you are, you will have incurred a significant ding on your credit score.

Can You Obtain Credit?

There are great deals out there on the housing market but a big problem these days is the inability for homeowners to obtain credit to finance their home. Large agency investors such as Fannie Mae changed their minimum credit score requirement from 580 to 620. Anything under 620 is considered high risk. Your local bank may require a credit score of up to 660 or higher. The question is, even if you were able to qualify for a mortgage, should you finance with sub-par credit?

A Bad Credit Score Will Cost You!

These figures are based on rates from 9/12/11. The example below clearly shows you how much you will be affected from obtaining a mortgage without an outstanding credit score.

How Can I Quickly Rebuild My Credit Score?

Whatever situation you may be in, the longer you are stuck in a bad credit rut, the more exacerbated your financial situation may get. Here is how to prepare: If you have a low credit score and/or want to prepare your credit situation to qualify for excellent loans for your next home purchase, by the end of this article, talk to a Lexington Law credit specialist. I have personally researched and found them to be the absolute best company to work with in rebuilding credit scores. Here is a direct number provided through the short sale blog for a free consultation: 888-586-6113 or you can apply through their website.

Hope this helps!

Peter

I was reading about short sales, as I do every Sunday morning on a great site for short sale information Short Sale Superstars. There was a discussion about a Bank of America Short Sale that had been approved, and then denied after the approval, a few days before closing. The reason:

The seller was a real estate broker and the listing agent works for the seller. The buyer used the listing agent to represent her.

Surprise Surprise, B of A said this is not an Arm's Length Transaction and rescinded the approval.

There are multiple things wrong with transaction so let me see if I can organize the problems coherently.

1. All short sales must be an Arm's Length Transaction and an affidavit needs to be signed by all parties saying they are not related to each other in any way. The listing agent works for the seller so that is not arms length.

2. The seller may be offered a closing incentive by the bank, but is not allowed to receive any money from the buyer. Since the buyer is using the the listing agent who works for the seller and would have received commission for the sale, a portion of which would go to the broker, then the seller is getting money from the buyer.

3. Again, since the listing agent works for the seller and would get commission from the sale, a portion of which would go to the broker, the seller would be receiving money from the sale outside of the closing incentive.

4. The buyer has agreed to a dual agency and is entitled to the information that the listing agent works for the seller and that this can cause potential problems with The Arm's Length Transaction.

I do not know if the seller was trying to pull something over on the bank, or if he was just not familiar with short sales but this was totally avoidable.

Buyers: get your own agent to represent you.

Sellers: If you are a broker, get a different company to represent you. If you are an agent, get another agent to represent you, not your broker, and ask the bank if it is ok to be represented by someone else in your campany first, not after you are about to close.

If you have any questions about buying or selling a short sale in Santa Clara or San Mateo County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E. 01191194

I am so excited about this news! I know, it doesn't take much for me to get excited, but this is really big news in my opinion.

Up until now if you were involved in a Silicon Valley Bank of America Short Sale they did not take electronic signatures. This would have been ok if the bank could sit with you in your conference room and look at the offers. We all know this does not happen and the paperwork will often be faxed several times before B of A gets to see a document. Since they cannot accept illegible documents it made things harder for the participants.

Also, despite the sometime lengthy process of a short sale, Bank of America will often say they need a document now, and not being able to get electronic signatures is sometimes tough.

Now, for any new short sales, you can send all documents with electronic signatures. This makes me very happy. As a Silicon Valley Short Sale Specialist anything that can make a short sale more efficient is ok with me.

So if you have any questions about short sales in San Mateo or Santa Clara Counties please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E. 01191194

It's time for the short sale/vs REO round-up for the first half of 2012. Today I will do the entire county, and then will break down the numbers by city.

So, in Santa Clara County from Jan 1, 2012 until June 30, 2012 there were:

1783 closed short sales

1099 closed bank owned home

Total sales during this time period were 8201

Total % Short Sales: 21.7

Total % REO Sales: 13.4%

Total Percentage Santa Clara County Distressed Properties: 35.1%

This is still a significant number in terms of percentages and at this percentage they are bound to have an effect on the overall market.

If you have any questions about short sales or foreclosures in San Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

If you receive a letter from Chase Bank stating that you are eligible for a short sale incentive, please do not throw it away. It is not a scam. Distressed home owners have been receiving these letters for over a year now, and guess what? They are the real deal!


Real estate agents and Realtors® have been reporting that their clients are getting large checks cut to them at closing. In some cases, as much as $30,000! Yes, Chase Bank is not only forgiving the debt on a short sale, they are giving the current sellers/owners a check at closing. Don't believe it? See an example letter below:


My name is Michael Collins. If you are currently considering a short sale in Wisconsin, I would be happy to walk you through the process and answer any questions you may have. I am certified as a Short Sales & Foreclosure Resource through the WRA. REALTORS® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities. The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk. Call my cell at 608-921-8536 and we can see if you qualify for any of these incentives.


Original Post -
Chase Bank Short Sale Seller Incentive


Additional Short Sale Information


• 

• Is a Short Sale right for my home?
• 

• Half of Homeowners Underwater on their Mortgage
• 

• Buying a Wisconsin home after a Short Sale or Foreclosure
• 

• Benefits of Buying an Owner-Occupied Wisconsin Short Sale
• 

• Tips for Buying a Wisconsin Short Sale

J. P. Morgan Chase is quickly becoming the bank of the incompetents.  Not only can they lose 2 billion dollars in investor funds, but they can also turn a $200,000 short sale into a $120,000 REO.  I'm beginning to think the interview process for a Chase job should include an IQ test.

Just when I thought the short sale department of Chase was probably the most ineptbanking sector in the industry, the REO department has jumped ahead.  I've listed and sold a number of Chase short sales and REOs, and one thing has been consistent.  They are all a nightmare.

The most recent, and my last, should have closed today.  As a matter of fact, this particular REO is a cash sale which could have closed more than a month ago, but Chase needed a minimum of 30 days to get it through closing.  After a brief snort and a few minutes of frustration laden blathering I accepted the inevitable. Chase time is not normal time.

Now, this contract was submitted to Chase May 1, 2012.  It took 22 days to get it through ratification.  Why?  A number of unbelievable reasons, but the last one was because the buyers initialed some of the early pages by handwriting, but the later addenda was initialed through electronic signatures.  They have to be the same.  Of course they initialed the last set by electronic signatures because they were traveling on vacation. 

A closing date was finally set by Chase, and we waited.  A little over a week before closing, a barrage of near panicked emails bombarded my email (as well as the attorneys and closing companies) asking for an immediate closing.  Everyone scrambled to get it done and then nothing.  Finally, an email arrives telling it has been moved up 1 day.  Whew!  Glad we could all drop SELLING AND CLOSING HOUSES what we were doing to accommodate the one day change in closing. 

The buyer's agent and I passed a few "We can't believe this thing is really going to close" emails back and forth, and we waited.  Today, I receive an email stating that Chase wouldn't accept the HUD because it was dated June 21.  That's odd, today is June 21, and it's closing day.  Shouldn't the HUD at least have closing day on it?  Call me crazy.

No, it has to have June 22 on it.  Oh, I see.  A dozen people can race around for a day to get the closing moved up one day only to have the MORONS (and I'm being generous) at Chase decide we can't close one day early because the date on the HUD is the day of closing.  I'm sure in Chase Parallel Universe, that makes sense. 

Now, they want a closing extension for another week.  I'm not sure it will really close in another week.  Actually, I think the buyer's agent and I are being punked.  I keep waiting for a camera crew to jump out and say, "Gotcha!" 

In Sunnyvale from Jan 1, 2012 until June 30, 2012 there were:

58 closed short sales

32 closed bank owned homes

Total sales during this time period were 447

Total % Short Sales: 12.9%

Total % REO Sales: 7.1%

Total Percentage  Sunnyvale Distressed Properties: 20%

20% of all Redwood City sales being distressed is enough to still have some effect on the overall market. However, as inventory is still so low unless these homes are truly physically distressed, which is more common with bank owned homes at this level, it probably will not have a long lived effect. It is interesting to see there are almost twice as many short sales as bank owned sales.

If you have any questions about short sales or foreclosures in San Mateo Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Redwood City from Jan 1, 2012 until June 30, 2012 there were:

46 closed short sales

22 closed bank owned homes

Total sales during this time period were 363

Total % Short Sales: 12.6%

Total % REO Sales: 6%

Total Percentage  Redwood City Distressed Properties: 18.6%

18.6% of all Redwood City sales being distressed is enough to still haves some effect on the overall market. However, as inventory is still so low unless these homes are truly physically distressed, which is more common with bank owned homes at this level it probably will not have a long lived effect. It is interesting to see there are twice as many short sales as bank owned sales.

If you have any questions about short sales or foreclosures in San Mateo Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Santa Clara from Jan 1, 2012 until June 30, 2012 there were:

97 closed short sales

47 closed bank owned homes

Total sales during this time period were 491

Total % Short Sales: 19.8%

Total % REO Sales: 9.6%

Total Percentage  Santa Clara Distressed Properties: 29.4%

29.4% of all Santa Clara sales being distressed is enough to have an effect on the overall market. However, as inventory is still so low, unless these homes are truly physically distressed, which is more common with bank owned homes at this level, most homes will not sell for much less than fair market value. There are twice as many short sales as foreclosures in this time period which is what we are seeing in many other cities. 

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Mountain View from Jan 1, 2012 until June 30, 2012 there were:

16 closed short sales

22 closed bank owned homes

Total sales during this time period were 349

Total % Short Sales: 4.58%

Total % REO Sales: 6 %

Total Percentage  Mountain View Distressed Properties: 10.58%

10.58% of all Mountain View sales being distressed is not enough to have a major effect on the overall market. Additionally, as inventory is still so low unless these homes are truly physically distressed, which is more common with bank owned homes at this level, it probably will not have much effect at all. Ther are so many employed people looking for homes near Google, Apple, and other high tech companies, that homes are getting multiple offers, selling at appreciating prices, and are almost always in high demand. It is interesting to see there are more foreclosures than short sales which we have not seen in other cities. 

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Los Altos Hills from Jan 1, 2012 until June 30, 2012 there were:

1 closed short sales

0 closed bank owned homes

Total sales during this time period were 45

Total % Short Sales: 2.2%

Total % REO Sales: 0%

Total Percentage  Los Altos Hills Distressed Properties: 2.2%

The low number of distressed property sales in Los Altos Hills is consistant with the other high prices neighborhoods in Silicon Valley. These areas are showing strong sales, good appreciation, and plenty of buyers with enough cash and income to purchase. Compared to the same time period in 2011 there were 2 closed short sales and 5 foreclosures with 52 sales for a total of 13.5% sales being distressed. 2012 is definatley different.

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

Most times when agents or homeowners know I have a listing down the street...they can safely say "This chic is about to destroy the values in my neighborhood"...OK, mostly true because of my Short Sales, really...I am just bringing the neighborhood down to it's true Market Value, none the less, I have been called The Grimm Reaper....

But what bites my behind is when I go to bat to get a Short Sale approved, show comps and get a bank to lower their BPO/Appraisal pricing to what clearly is a fabulous deal and then....wait for it...I hear....CRICKETS from the Buyer's side...the buyer agent frantically trying to pin down their buyer, wondering if that buyer has possibly gone on a crusie to a third world country and cannot be reached to take The Deal of The Century....

BofA countered at $216K, and since I felt that it was still too high, and the buyer's offer was still lower...  we were able to "Convince" the bank to "come to the light" and see the true value is at $200K....which the buyer wanted...then...and stil NOTHIN', good news here is at  10am this puppy goes back onto the market as an Approved Short Sale, but we all know what happens...I WILL NEED TO RE-ENTER ALL THIS INFO AGAIN ONCE WE HAVE ANOTHER OFFER & BUYER...

Dear Buyer, If you don't surface by 10am, Good Luck, Hope I dont eventually come to  neighborhood where you end up buying...because I know you have heard of That Chic That Does Short Sales.... .

In Los Altos from Jan 1, 2012 until June 30, 2012 there were:

3 closed short sales

3 closed bank owned homes

Total sales during this time period were 192

Total % Short Sales: 1.5%

Total % REO Sales: 1.5 %

Total Percentage  Los Altos Distressed Properties: 3%

Again, we have a high priced neighborhood and almost no distressed property sales. Values are appreciating and there are more pople trying to buy homes than there are homes available. Additionally, there is very little new contruction before the crash, so there is not a big group of people who bought into a large development and are now underwater.

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

Anyone with experience in short sales and REO's know the bank requires proof in writing that the buyer has the necessary funds for the purchase of the property. If the buyer is paying cash I have always advised them to obtain a letter from their bank stating they have the necessary funds for the transaction.

In a recent short sale where I had the listing, the buyer submitted a letter from his bank signed by the Vice President of Banking which included his contact number and email.

The negotiator with the bank would not accept the letter as proof of funds and asked for a copy of the buyer's account statment. His reason was the wording "access to cash currently on deposit". He said the buyer could move these funds from this account into another account at any time. I responded by saying the buyer could still move funds from an account after he gets a copy of the bank statement. He simply said "A bank statement would be different".

I understand an actual copy of the bank statement is a harder proof of funds, but if there is any issue, the negotiator could call the Vice President and get clarification. If the letter was truly a fraud then what would be the end game? Not closing? I don't understand why banks are making the process more difficult than it has to be. In this case, it ended up being an acceptable offer and went to closing.