Wednesday, June 04, 2008

Documents Requested by Lenders in a Short Sale

If your home is considered a short sale or short pay, when an offer is made on your home, the lender will most likely ask for the following documents.

1. Income Statement showing how much money you make and your total expenses. The lender wants to know how much money is left over after your expenses. It's usually negative for a homeowner who can't afford their home.

2. Bank Statements for the last two months. Keep in mind that if there is a lot of money in your bank account, the lender will wonder why you are not using it to pay your monthly payment.

3. Two most recent pay stubs. Lenders want to know how much you're making at the time. This is so they can determine if they'll let you off the hook.

4. W2 Statement. The lenders want to know how much money you made the prior year.

5. Letter of Authorization. The lenders want you to authorize your real estate agent or another third party to have authorization to discuss your account.

6. Hardship letter. This is a letter by you to your lender on why you can't afford the payment anymore. Loss of job, death, health, etc... There are several resources online which will supply you with a sample hardship letter.

7. Listing agreement. This is the agreement you signed with your Realtor when the agreement was made to sell your house.

8. Signed Purchase Contract. This is the offer the buyer wrote also signed by you.

9. Estimated Hud 1. The escrow company will put this together.

10. Pre-approval letter. This will usually be included with the offer from the buyer. The lender wants to know that the buyer can get a home-loan.

Every lenders requirement might be different but the items requested above will usually be what they ask for. Keep in mind that the only time lenders really want to talk to the listing agent is when you have accepted an offer. So the first step is to give your agent authorization to have an open communication with your lenders.

Quick Links:

Short Sale homes in the San Fernando Valley including Sherman Oaks, Encino, Studio City, Toluca Lake, Van Nuys, and Santa Clarita Valley.

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