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Short Sale Information

Short Sale Articles

Approval

Waiting for short sale bank approval can be stressful, especially with wait times lasting as much as four months. For many homeowners, it simply makes more sense to let the bank foreclose, since they don’t get to keep their homes anyway. But getting approved for a short sale isn’t all that complicated. It’s all a matter of knowing what makes sense to your lender and how you can make a strong case. This page shows some of the common criteria for short sale lender approval and how you can optimize your application.

Negative Equity

The best candidates for short sales are homeowners whose unpaid balance is greater than the home’s current value, even if they are still current on payments. To prove that your mortgage is “underwater,” you or your agent can present price data on comparable homes in your area along with your latest mortgage statements.

Mortgage in Default

Government guidelines have recently allowed short sale bank approval for people who haven’t missed any payments. However, most lenders don’t see much sense in short-selling homes that could still be saved through other means. Call up your lender to ask what their policies are and what options are available for borrowers in your situation.

Financial Hardship

Another common requirement for short sale lender approval is a hardship that led to financial distress. Examples include health problems, unemployment, or family problems such as divorce or death. Lenders want to see that the hardship was beyond your control, so reasons like overspending or bad investments may not help your case.

Lack of Assets

Usually, as long as a borrower still has a means of maintaining the mortgage, a lender will seek short sale alternatives. They may look into other properties or investments you own and ask you to cover part of the loss upon short sale bank approval. If you have any such assets, you may need a valid reason for not using them to pay off your mortgage.

Each of these weighs in differently according to your lender’s policies and your particular situation. That’s why it’s important to get informed and know what your bank is looking for. By doing your homework and arming yourself with the right data, you can get short sale bank approval and get back on your feet in no time!