Hey, I’m new to the Short Sale side of the real estate industry but know that it’s growing and it’s still early to get in. I’ve generated a decent amount of contacts this week that are potential short sale candidates. The questions is, what do banks look for in approving short sales? I worked on the mortgage end and knew my guidelines so knowing if a loan would be approved was easy. Now on this end, how do you know if you got a good shot of getting the SS approved? What are the main factors the lenders look for? Any help is appreciated.
If it makes sense to the lender they will accept. You have to build a good case in your favor. Meaning if they ask for pay stubs and the homeowner is making well more than enough to pay for the mortgage, the lender will not like that. A lot of your acceptance will hinge on the BPO. It’s been determined by many gurus that the lender will accept 82% of the BPO if it’s FHA or VA. So if your offer comes within that range, and you may have to re-negotiate the purchase price after you know what the BPO came in at, they will usually accept.
82% of the BPO but not less than 63% of the original loan amount.( FHA)
VA is 88% of BPO
Freddie Mac loans are 92% of BPO
Fannie Mae loans are 90% of BPO
You need to build a package that is professional and shows the debtors inability to pay.
This, with comparables showing days on market and estimates of repairs to bring the property to a first class standard are important.
Do not give the lender anymore than they ask for unless it’s relevant.
If there is something you or th edebtor can’t supply i.e a W2 or tax return, then get the debtor to write aletter and sign it explaining why it is not included.
hope this helps
GQ
hope this helps