I made an offer to Countrywide on a shortsale for 50K. My agent said they wanted to see a HUD statement in order to consider the offer which means we would have to open title and they would deposit my earnest money check in the amount of $1000. Then it could take 30 days to get a decision.
I told him no way. I would only open title after the offer is accepted. Is this the right decision? I didn’t want money tied up in a deal that was not accepted yet. Why do they need to see a HUD? Anyone have any advice on this?
For all its worth, my broker told me that he has seen quite a few of short sales where the bank asked the money to go in escrow even before they make a decision on the offer. I understand why they would do that - to ensure that they are not wasting time on an offer from someone that is not willing to go through with it. Having said that I would probably feel the same way as you do.
Most lenders require the same information from the homeowner. Here is a list of required documents:
Authorization to Release Information. This will allow you to talk with the lender on behalf of your client.
Handwritten hardship letter.
Purchase Agreement.
Addendum to Purchase Agreement. This states that many offers will be submitted during the negotiation process.
Listing Agreement.
Last two years tax returns.
Last two months bank statements.
Last two pay stubs for all borrowers.
Borrowers financial statement. A basic incoming and outgoing expense sheet will be fine.
Detailed repair estimate if repairs are needed.
HUD 1 statement or NET Sheet showing the lender what their NET figure will be and any other expenses owed on the property.
If the homeowner doesn’t have bank accounts or is unemployed make sure that this is stated in the hardship letter as the Mitigator that is assigned this file will think that there are items missing and could end up ignoring your file.
What is your exit strategy? Use the end buyer money.
Yes they need to see a hud.
You do not have to open title to obtain a HUD1. Your agent can get a preliminary HUD from a title company that he has developed a realtionship with. The title co. will provide the HUD with the hope they will be used to close the deal if the bank approves the short sale.