Working Backwards...Short Sale help!

Hey everyone. I’ll get right to the situation.

So i’m out there door knocking, calling and not knowing what the heck i’m talking about (well, not really but close). So now that i have some good candidates for shortsales and very motivated home owners, i came here to learn more about the process. I probably should have come here first to get up to speed, but i’ve always found “jumping right in” works best for me. Plus it helps with the confidence and working with people, etc etc.

So now i’m in situation where i have quite a few deals at hand but I lack the experience in SS’s. So i’m a bit backwards i guess. Probably not the best way to start, but it’s a start regardless.

Anyway, from reading this forum the past few weeks i think i got a handle on what i need to submit within the SS packages. But i did have a few really simple newbie questions that i can’t seem to find the answers to. I was hoping you guys can shed some light.

There’s actually two questions here. So first, after obtaining an authorization letter from the HO, do you call the bank first thing and tell them your going to submit a short sale? In other words, do you prep them or warn them first? Or do you just send in the SS package and call them to make sure they got it? Which of course then you would keep checking back in with them, etc.

And the second part of the question is about the SS package itself. This part is confusing me the most. Not sure how to really ask this, but here goes.

Is the SS package something that we put together ourselves? Or does the banks send out a specific SS package for us to fill out (and ofcourse add the documents to) and mail back? And what i mean about us putting it together ourselves is that I would think that the bank would assume that if you’re calling about SS’s, you already know the SS business and what goes into a package.

So if the SS package is something we do ourselves to mail in, my question is, what’s the format? A thick binder to hold the docs? A simple sleeve that hold the docs? What’s the presentation that banks prefer? Is there a standard? Again, when i mention about putting an SS package together ourselves, i’m not referring to the documents as those are a given. Just the outer packaging or standard type packaging.

Or i’m just wrong all around and all the documents are sent via fax?

Thanks everyone and i’m looking forward to adding to this community when I get some deals under my belt.

Here is the process for a majority of the lenders:

1. Get an authorization from the seller that gives you permission to receive information form the lender.
2. Go ahead and get the sellers recent bank statement, paystub, and a sob letter that states what has happened to them that has put them in the position that they are in.
3. Get in tight with a title company. The lender is going to want to see a prospective settlement statement that will show how much money they are going to yield.
4. Fax in the income documents, sob letter, purchase contract that you hopefully have negotiated with the seller, and the settlement statement to the lender.
5. Wait 48 hours.

If you ever have any questions please feel free to e-mail me at: krisvanzant@frontierlending.com . I have done several of these, and I dont’ mind helping.

I have some questions also would you mind if I e-mailed you?

No problem. Let me know if I can help.

I appreciate the response and help.

Though i think i asked the wrong question. I understand the general process, but i believe my question could have been wrapped up a bit more simple.

So generally, my question was, does anyone know of any banks that do not send out SS packages/requirements to you, but completely rely on you to put together your own package for them? Or has anyone ran across a situation like this?

Then, if that was the case, my other questions do apply about what the format would be, etc etc.

But thank you again KyB and will surely contact you when i think of more ways to be confusing. lol

I agree with your deal just jump right in this is best sometimes . But any way submit in a bussines maner all papers and if you are missing any thing the lm department at the bank will surely let you know !! As well how were you looking to pay for this ??? This all so is a big question .

Some short sale answers.

Have the seller sign an authorization release form. Pretty basic form.
I usually get copies of their last mortgage statements and take them with me so I can reference them. After that you play the automation game and find your way to the loss/mitigation dept to the lender (both if there are 2 mortgages).
Once there then you tell them you are a third party calling on behalf of their borrower
They will want you to fax in the authorization form before they can start talking about everything
WRITE DOWN the names you talk to, fax and phone numbers for the L/M dept, and ask them for direct lines.
Also ask who this file is going to be assigned to and if you should attention the fax to anyone inparticular.
Once they have the authorization then you ask them what they need for a SS package and that’s about it.
They will tell you what they need and you just go out and get it from the seller.
Typical stuff is hardship letter, W-2’s, bank statements, offer to purchase, photos, HUD-1, etc.
They might order a BPO or inside appraisal.

Once you have everything ready to go CONFIRM the fax # that it needs to be sent to. Fax #'s change around so make sure you have the right number.

Wait 48 hours like Kybroker said and call them to see if they recieved the package. Then the negotiations start and you hopefully get the property.

Also if you are just “jumping into this” I would suggest getting your financing in place. Otherwise you are wasting your time. Some lenders want pre-approvals with their SS package. I sent one into Wells yesterday and they wanted this. Food for thought.

Nate-WI

Banks will always have a list of info they want you to get them to do a short sale.

Nate, I really appreciate the information. Quick question. Documents are faxed, but when it comes to photos, I assume you mail those in directly? Email? Scanned and faxed? What’s the most acceptable to them?

Thanks RDR for clarifying.

I have mixed feelings about pics… of course they help, but the person doing the BPO is typically required to send in at least 12 or so pics of the property, so I really do not see how your pics will show much more unless you zoom in on specific damage, but you could just have the BPO person do that for you. Either way, zooming into an issue on the side of the house when they are receiving a picture of the whole side of the house, obviously seeing it’s not very noticable, won’t help.

Pics will help, yes, but don’t get over-zealous because the loss mitigator will be seeing overall pics as well.

It helps if you at least know what your doing before sending in your short sale package. The loss mit rep will open your file and in 4 seconds know whether or not you know what your doing beginning with if the correct paperwork is in the right chronological order. They don’t have time to rifle through the file looking for specific documents. They want to look at the HUD-1 they want to know EXACTLY where it is in the file. They have 200 other files on their desk and don’t have time to explain to someone how to submit a short sale package correctly.

By knowing what the heck you’re doing makes the loss mit’s job much easier which makes it much easier to work with you than some cowboy who just thinks they know what their doing and throws all his paperwork in a file in no certain order for the loss mit rep to figure out. Like I said, they have 200 other files sitting on the desk and if yours isn’t done right A-Z it’ll go on the bottom of the pile 99% of the time regardless of your time frame.

Learn the process BEFORE you submit a package. Buy a qualified course and learn the right steps and you’ll save a ton of frustration in the long run by presenting yourself as someone professional who knows what their doing and your success rate will speak for itself.

And one other quick point, ALWAYS, ALWAYS meet the BPO realtor at the property. It is in your best interest to provide him/her what your looking for as far as pricewise, any defects, low-side comps etc. So make sure the bank knows you are the contact source for the homeowner so you’ll know when the BPO is ordered and you can make sure your there to meet him/her.