The Fort Collins, Loveland, Windsor and Greeley region has seen its share of foreclosures over the past several years with many homeowners able to sell their home as a “short sale” to avoid foreclosure. Short sales can be tricky and time consuming but for homeowners without any other option other than foreclosure then this could be a better outcome.
Here is a a guide of the short sale process in the Northern Colorado area. For more information about any aspect please be sure to contact me.
What is a Short Sale?
A short sale is a workout program that allows a borrower to sell the property, even if the proceeds are less than the loan payoff, due to low property value. Upon final approval, a short sale can help homeowners avoid further collection activity or foreclosure action, which can result in adverse credit reporting and possible tax liabilities.
How to Get Started
§ Homeowner is required to call the Short Sale Phone team at (866) 903-1053. Financial information is reviewed and pre-foreclosure sale counseling is completed.
§ The realtor faxes the complete short sale package to (866)-359-1975, Attn: Setup
Documents Required to Begin a Short Sale Application.
From the Realtor
§ Fully executed listing agreement
§ Net sheet/HUD (our payoff is not necessary)
§ Fully executed purchase contract with all pages initialed by buyers(s) and seller(s).
§ Buyer pre-qualification letter or proof of funds if cash offer
From the Homeowner
§ Signed and dated financial worksheet listing all monthly expenses
§ Signed and dated hardship letter (why they are unable to pay the mortgage)
§ Letter authorizing the realtor access to information on the account. It must be dated and include the last 4 digits of the borrower’s Social Security Number, their signature, the full account number and the property address
This is an estimated timeline based on business days and
assuming all documents are submitted
in completed form and timely
|
Event |
Timeline Business Days |
Total Process Business Days |
|
3 |
3 |
|
5 |
8 |
|
10-17 |
25 |
|
Additional Steps:
|
10 |
35 |
|
All Items above steps complete
|
2 |
37 |
Additional Information
§ Short sale approval is good for 30 days. If closing does not occur within 30 days, the entire short sale package may need to be resubmitted with updated information, or the approval process may need to start over.
§ Realtor or homeowner inquiries should be directed to the negotiator assigned to the file, whose information will be communicated during the introduction call.
§ Realtors are generally allowed 5% to 6% commission based on Investor rules. If dual agency applies, maximum commission is 5%. Some investors operate on a reduced commission structure and the actual commission schedule can be confirmed during the introduction call.
§ This must be an “arms-length” transaction. The property may not be sold to anyone the seller has a close personal or business relationship with including family, friends or neighbors.
§ During the introduction call the following will be addressed:
-Commissions
-Fees and Costs
-Pricing of the property
-Timeline
§ In order to reduce the 37 day response time the liquidation team is strongly recommending that the home owner and/or realtor notify us of their intention to sell their property as soon as the listing contract is signed. This will allow us to complete the property valuation and borrower financial evaluation prior to receiving an offer significantly reducing the short sale decision time on a submitted offer.
§ In some cases investors and/or PMI companies require the mortgagers to sign an unsecured note for some or all of the difference between the property sale amount and the total amount due. This is communicated as part of the response on a short sale offer.
Liquidation Contact Numbers
§ Loss Mitigation Phone Team – (866) 903-1053
§ Loss Mitigation Setup Fax – (866) 359-1975
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