Short Sale Process


Cam anyone explain the ss flow? or point out a links where I can find it?


Here you go…

  1. Communicate with Lender
  • Have distressed homeowner fill out a full financial statement (listing all income and expenses)
  • Send homeowner’s hardship letter and supporting documents (tax returns, bank statements, latest paystubs, doc’s note, divorce judgement, disability, etc.)
  • Have homeowner authorize you to speak on their behalf regarding their loan (Authorization & Release of Info Form)
  1. Submit a short sale package to Lender (repeat all steps for 2nd and 3rd lenders if applicable)
  • All the homeowner’s financial hardship info and documents
  • Authorization & Release of Info
  • Purchase Agreement/Offer to Purchase (include proof of funds or pre-qual letter)
  • CMA (Comparative Market Analysis)
  • HUD-1
  • Net sheet (default evaluation/equity analysis)
  1. Get cozy with Lender
  • Find out who and which department your loss mitigator/customer service rep is
  • Get this person’s email, direct fax line and direct phone number
  • Follow up on your package via email, phone and fax
  • Keep following up
  1. Lender will take steps to approve or deny offer:
  • They will review paperwork
  • They will ask for anything that is missing or updates if the file gets older than 45 days
  • They will ask for “release of lien” from any junior lien holders/2nd mortgages
  • They will do their own BPO (Broker’s Price Opinion)
  • They will submit the complete paperwork and offer to their “investor”
  • They will send you an approval or denial of offer
  1. If “denied,” then resubmit everything with updated documents and new offer (or addendum to original offer).
    If “approved,” you will have 10-15 days to close escrow.

Good luck!


is the process different if property is being listed for short sale with a real estate company involved ??

i had looked at one that a realtor took me to see last week.

The process is the same. The difference is who is doing what. If a realtor has listed a short sale, one assumes that the realtor is taking care of sending the SS package and negotiating with the loss mits. So, the seller/homeowner has authorized the realtor, and not you, the buyer to handle the short sale with the bank.

In cases like these, you have to make sure the realtor knows how to do a short sale and has adequate experience or guidance for navigating the process. Ask for regular updates and offer to help follow up if the realtor needs it. You may need an additional authorization from the seller if they are willing to give it.