Posted by NJDave on May 24, 2000 at 11:58:10:
Most mortgagee short sale criteria require that the Borrowers provide a great deal of financial information including tax returns, personal financial statement, paystubs, bank statements, retirement account statements, etc. Frequently, the mortgagees also require that the Borrower are to receive ZERO proceeds from the Sale, that the premises are to be sold in an as-is condition, that any real estate commissions be slashed in half or eliminated entirely, and that the Seller be made aware that any forgiven debt may be treated as taxable income by the IRS.
Each mortgagee or mortgage loan servicer has it’s own set of criteria for short sale, and their own policy that dictates under what circumstances a short sale is considered. There may be a PMI Company (private mortgage insurance) whose approval is required, perhaps a master-servicer, or the loan may be part of a pool of mortgages that require even more special attention. FHA/VA mortgages are treated differently than conventional, as are some ‘affordable housing’ purchase money mortgage loans… that require the Borrower reside in the premises for a number of years or risk having to pay a premuim to pre-pay the loan.
Often, a BNK Trustee’s approval is required. In NJ, a BNK homeowner cannot even list his property for sale without BNK Trustee’s consent, let alone sell it.
There may be superior (to mortgage) liens including IRS and property taxes that need to be addressed, and often junior liens that need to be negotiated.
That’s why there are individuals who specialize in the administration of short sales… One deal can become a full time preoccupation that leaves little time to pursue new deals…