Documents Required For Bank Short Sale
Banks base most, if not all, of their short sale decisions on the borrower’s financial situation. This is why they require so many documents for short sale applicants, including a hardship letter detailing the circumstances of their default. The point is to give them as accurate a picture as possible of your finances. The more complete your documentation is, the faster the short sale process will be and the better your chances of getting approved.
Here’s a list of some of the most commonly requested documents for short sale:
- Financial Analysis: Most banks have a financial statement form where you fill in various details about your finances, from your monthly income to down to the smallest expenses(such as transportation and daycare). Otherwise, you can ask an accountant or short sale attorney to help you.
- Bank Statements: This will show the bank how your accounts have gone up and down over the course of your default. The standard requirement is two months’ worth, but some banks ask for just one month while others want up to six. Include all the accounts you have, including savings, checking, and retirement funds.
- Proof of Income: Not all banks require you to be employed, but if you have any sort of income —including welfare—you must include proof with your documents for short sale. Make sure to have at least two months’ worth at hand.
- Tax Returns: Lenders usually ask for tax returns and W-2s for at least the past two years. Self-employed borrowers may have to provide more.
- Property Information: Include a copy of your mortgage contract, deed of trust, and your latest mortgage bills. The requirements vary widely from bank to bank, so the best thing to do is call your bank to ask. Originals aren’t usually included in the documents for short sale, but you should be prepared to present them during negotiations.
- Proof of Hardship: If you or a family member fell ill, provide copies of the medical bill and a certification from the doctor. If you lost your job, include a certificate of dismissal or some other equivalent. Other examples include divorce decrees and a comparative market analysis of similar homes, to prove that your home has fallen in value.