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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

Ocwen is continuing to grow as they won an auction for Rescap's mortage servicing and origination assets. Files that were previously being serviced with GMAC will now be serviced by Ocwen. Ocwen is a large servicer who is well known in the short sale community for it's outsourcing and not wanting to postpone sale dates. With that aside Ocwen is a fairly easy lender to deal with if you have contacts and know how to maneuver through their systems.

Brett@ishortsalenow.com

www.ishortsalenow.com

310-564-6389

Need feedback, help and advise.

I've listed a home (Nov. 2011)  in Scottsdale AZ, for a seller who was discharged of his Mtg Debts thru Chapter 7 BK in  2 months prior-Sept.2011.

The seller did not want a secondary negative credit reporting of a  'foreclosure' on his credit after his BK, so that is the reason he would like to short sell.

The first Lien holder ( B of A) approved the short sale and offered the junior Lien holder (chase) $6,000 to release the lien.

Chase sold or transferred their Mtg debt to a Debt collector named Five Lakes Agency (out of MI), who I believe works under the company known as Randall, Miller & Associates P.C.

This Debt collector has demanded all the short sale info and  contract, including the buyers (who I do not represent) Pre Qual letter. (Fincancials!) in which I  provided everything to them to move for  their approval.

This Debt collector stated, "The house has NOT been on the Market long enough, and to dump this accepted buyer and find another one who will pay them $20,000, otherwise, the sale will NOT happen". They said they "will NOT forward the contract and B of A offer  that pays  Chase $6,000 and a minimum of $20,000 is all they can forward to Chase." 

Now, let me get this straight..

A 3rd party (not associated with the debt in Michigan,  is a negotiator for a short sale which is  practicing Real estate- UNLICENSED in AZ-  as well as attempting to collect an 'uncollectable' debt from a party (Buyer)  not associated with the actual debt- in order to strong arm a hold on the junior Lien release.

What happened to MARS compliancy?  How do I get past this Debt collector to let Chase KNow they have $6,000 free money to simply release the Lien in which they have to do anyway if the home forecloses...

Anyone- anyone- ?