Heres the situation. (I’m out of my element as I havent done a SS B4)
Owner is willing to walk away from property and is willing to cooperate 100%. Understands 1099 aspect and is calling lawyer to see if he qualifies for hardship exemption.
Also understands what happens at foreclosure and deficiency judgements. Property has 1 loan for 150K. Also has grant for 20K (does not need to be paid back if owner lived in it for 10 years…he didn’t). Owner willing to sign P&S agreement for offer to bank, Authorization for info, hardship letter, Financial statement, bank statements, etc. and whatever else needs to be signed and/or provided. Owner was left high and dry by gf (he gave her the $ to pay the bills - she didn’t). Owner received forebearance for behind payments and is current but will not be making anymore payments. His loan is in loss mitigators hands already. He has not gone for bankruptcy yet but will shortly. He lost his job and is only working part time. owner has also tried to sell personally and with realtor to no avail.
The Bank is Wells Fargo. I have not contacted them yet but was going to contact them and ask for SS package. In the Meantime, I was going to get the P&S agreements signed, Authorization to Release Info,POA,Escrow Release Authorization. I am meeting the owner of the property this W/E to take pictures of the surrounding area and of the properties deficiencies,problems. I will aslo get the hardship letter that day. He said he would be able to provide bank statements, and a financial statement by end of week. I will also get a favorable Broker Opinion Letter b the Broker who had and will give up te listing.
My questions are:
Should I have my Lawyer send the package or should I send it and only have her deal with it if a SS is approved?
Should I Include a deposit check for the Offer thats made? (I will send a proof of funds letter as well as a financial statement)?
Should I even call for a SS package or get name of loss mitigator who owner has worked with and contact her directly for SS package?
Anyone dealt with Wells Fargo? If so how are they to deal with. Discount % given?
My lawyer advised against having owner put property in trust because of the length of time to do the deal was short although she recognized the protection it provides. She said not woth the trouble for the amount of time transaction was going to take. She will do it if I insist tho, but really doesn’t want to especially if the bank won’t do the deal. Any comments?
If your lawyer is a Real Estate attorny, they can assist by moving the sale through once the SS is approved. Otherwise, I do not really see a need for lawyers in SS negotiations.
If your lawyer is not a Real Estate attorny – have them stay away.
I do not call and ask for SS packages – I have my own packaging format, which goes over and above what your typical lender requires in term “SS package”
The first thing you should do is get comps/BPO and first determine if the property is a true short sale candidate. (Check if it is indeed upside down and a short sale is an option.)
Yes, get all the authorizations and releases signed immediately. Next, don’t bother talking to the LM until AFTER you have submitted the package. WF won’t give you a package, you have to provide it for them. See stacking order of documents below. Just prepare a fax cover sheet or cover letter and Priority mail envelope to send to the LM already assigned to this borrower.
I don’t advise your lawyer send the package unless she is also going to stick with the process and negotiate the short sale all the way through. The less people in the mix, the better. Open escrow and put your deposit there - do not send it to Wells Fargo. Also give escrow your pre-qual letter or proof of funds.
Start your offer at $.50 on the dollar. Wait for lender to counter and negotiate from there.
Stacking Order of SS Pakage:
Seller’s hardship letter
-Seller’s financial statement
Supporting documentation for hardship (latest 2 paystubs, latest 2 bank statements, latest 2 tax returns, doctor’s verification of disability, lay=off or termination letter…etc.)
-Authorization/release forms
-BPO
-Purchase Agreement
-Estimated HUD-1
-Net Sheet (SS evaluation)
My Lawyer is a Real ESTATE Lawyer and owns a title company as well (located right next to court house). However, I did not intend to use her services unless I recieved an approval letter so she could just close the deal. I don’t want to pay her to do this a million times and get no’s…so I thought I’d use her only if I got a yes or counter-offer.
The house value is approx. what is owed on the house. I will follow your stacking order and prob. submit package by next Wednesday. I’ll let everyone know what happens when I get notified.
I am not familiar with the short sale process as the few deals I have done came from banks contacting my realtor who contacted me. I have just had a possible short sale fall into my lap and I am not sure how to handle it. I am trying to do get some info on the process before we move any further.
I am not familiar with the documents that have been previoulsy listed
Stacking Order of SS Pakage:
Seller’s hardship letter
-Seller’s financial statement
Supporting documentation for hardship (latest 2 paystubs, latest 2 bank statements, latest 2 tax returns, doctor’s verification of disability, lay=off or termination letter…etc.)
-Authorization/release forms
-BPO
-Purchase Agreement
-Estimated HUD-1
-Net Sheet (SS evaluation)
Are these documents that I need to have drawn up by a lawyer or can I obtain them through an easier method. I realize a number of the documents must come from the seller but what about the others?
The short sale process is complex and has many moving parts. You need more than just a list of docs to send in the bank. Check out freeshortsalestuff.com or the shortsalemoneymachine.com (not free).
None of the documents listed need a lawyer to draw them up. They are all available through the seller and any realtor. Word of advice - it may be worth it to get an experienced RE agent to help you with your short sale. Their comission is paid by the bank, so you don’t have to put any money out of pocket anyway.