Do you need to Short Sale Your Home? Or Your Client?

Guide To Help with a Short Sale Prequal

What You Need To Know

When you receive a call from a potential Short Sale client it is critical that you establish, as early as possible, that the client is a legitimate Short Sale candidate. Below, is a list of the information you must have to determine if the caller is someone for whom a Short Sale is appropriate. Keep in mind, you are not just qualifying them financially, but also for cooperation. You need a client who is willing to do their part, or no deal:

You Need -

The Property address
Is it Owner occupied or held for investment?
Occupied or vacant

Information on all those who are on the loan – and only those who are on the loan.
Determine the willingness of ALL those on the loan to cooperate
Gross monthly income for those on the loan

The Mortgage information on all loans
Who is the lender(s)?
What is the balance(s)?
Are the loans current or delinquent? if delinquent
*when was the last payment made?
*has an NOD been filed?
*has a NOT been published?
What is the payment for each mortgage?
*If pick-a-pay, get the amount required to cover all interest
Are the mortgages “purchase money” or not?

What is the hardship?
What has changed so that they can no longer afford their mortgage?
Note: Most times it is a loan product problem. If so, look at the numbers.

Things to look keep in mind:
1) Calculate their front end debt ratio (housing expense divided by gross income – for borrowers only. Rule of thumb – if the ratio is below 35%, the problem is not their mortgage.
2) If they are too far into the Foreclosure process, you may not have enough time to help.
3) Trust you’re your gut. If it doesn’t pass the “smell test”, don’t take the deal.
4) If the 2nd is non-purchase money, the client will likely need to make a contribution towards the loss. Prepare the client for the contribution. The client should be able to save money by not making the mortgage payment – that should more than cover a $3,000-$5,000 contribution towards the 2nd.

Last, run a "Statement Of Identity."

Fidelity National Title and Chicago National Title have the easiest system in place to run the property ID. Contact an office near you or, contact me so I can do that
for you.

-Christopher Rockey
rockey@mresolution.com