Need example of short sale letter you use.... - Posted by JohnB_NJ

Posted by Nate on March 18, 2001 at 13:16:10:

I know the feeling, it sucks being old! (27)


Need example of short sale letter you use… - Posted by JohnB_NJ

Posted by JohnB_NJ on March 17, 2001 at 23:52:23:

I have a few sellers that want to deed me their properties. The deals would be good if I can get short sales from the lenders. These loans are a few months behind and foreclosure suits have been filed so I have to work through the foreclosing attorney.

What I really could use is a few examples of what your guys are using to request a short payoff from the lenders.
Your advice and assistence would be greatly appreciated. My email is

Thank you in advance…

John Bittel

See you in Atlanta!

Re: Need example of short sale letter you use… - Posted by Ben (FL)

Posted by Ben (FL) on March 18, 2001 at 11:13:04:

First, working through the attorneys will guarauntee that you will not buy the house. They’re too busy to deal with you. Plus, they won’t deal with you unless they can bill someone $250 an hour for it.

Write or a type a note that says "To whom it may concern. By signing below [Name of seller] hereby authorizes you to discuss any and all matters regarding the loan and foreclosure on [house address and loan number] with me [your name]."
Have them sign and date it. Then get the number of the customer service rep. of the lender from the seller (payment stub, other documents, or just look it up. As a last resort, ask the attorney - They should give it to you, but it’ll take them 6 days to call you back).

Call the customer service and either ask for the Loss Mitigation department or tell them you want to submit a short sale offer. They’ll transfer you a few times, and eventually you’ll end up with someone who knows what you’re talking about. Make sure it is the person who is responsible for the loan you are interested in shorting. Fax them the note from the seller.

Then, here’s what I do (this has never failed, by the way - but it only works if the conditions are right). Calculate how much the bank has already lost (6 months payments, interest, fees, etc.), then add up the costs of any repairs you will need to do to sell the house for top market price (expensive paint with PH D painters, new roof, carpet, tile, fixtures, etc.) Be genereous, but don’t go overboard. It has to seem reasonable. Also, assume that after it’s fixed up, it’ll take 6 months to sell so that’s another 6 months of lost principal and interest payments. Plus, a Realtor will take 6%. Add all that up, then subtract it from a low estimate of fair market value. This is where I start to figure out what my short sale offer is going to be.

Present all those numbers in an easy to follow column. Then, I just send a fax that says "I want to make a short sale offer to settle this loan. The auction has been set for {Date}. The house is worth “X”. To get the house ready for sale will take “$”. Here’s my offer, and here’s how I arrived at it.

You have to show the bank that, while they will lose with your offer, they will lose just as much, or more, if they take the house back at auction, the try to sell it.

As long as your tone is friendly, informative, and non-confontational, you should get results.

Finally, the most important thing to remember is, call them twice a week at a minimum “Just to check the status of the offer” They’ve got a pile on their desk, and they don’t care whether the foreclosure happens or not. You have to drive them to do their job.

Re: Request for Short Sale is a process… - Posted by NJDave

Posted by NJDave on March 18, 2001 at 08:08:07:

It’s a process, often requiring many months of negotiations with all interested parties (mortgage loan servicer, master servicer, PMI, etc.) not simply a ‘letter’. Put yourself in the shoes of the mortgagee. What would you want to see? In addition to an appraisal, borrowers financials, etc., I often used a cost benefit spread sheet that included a foreclosure timeline. You have to convince the mortgagee that it is in their best financial interest to accept a short pay off. Their decision to accept or reject their Borrower’s proposal will be a business decision. Give them some numbers to crunch. Don’t overlook your role as a non impartial ‘foreclosure consultant’ with respect to the Borrower’s exposure to income tax liability resulting from a short sale.

Re: Need example of short sale letter you use… - Posted by B.L.Renfrow

Posted by B.L.Renfrow on March 18, 2001 at 12:04:55:


How do you address the tax implications with the seller? Do you just inform him he’s going to get a 1099 for the loss taken by the lender and will be responsible for paying tax on that amount? Or do you attempt to negotiate with the lender to somehow avoid a 1099 to the seller?

Brian (NY)

Re: Need example of short sale letter you use… - Posted by Nate

Posted by Nate on March 18, 2001 at 13:01:45:

Wasn’t there a bill in Congress last session to stop treating a short sale gain as income?

Or am I hallucinating again?


Re: Need example of short sale letter you use… - Posted by B.L.Renfrow

Posted by B.L.Renfrow on March 18, 2001 at 13:09:09:

I do remember reading something about that, but I thought it never went anywhere. Or was it part of the House version of the bankruptcy reform bill?

Arrrrgghhh…I hate it when BOTH of my brain cells are synapsing, and I STILL can’t remember…

Brian (NY)