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Being Thorough and Detailed Will Help You Obtain Short Sale Approvals

The Importance of Carefully Reviewing the Seller’s Paperwork

filesYesterday we were a little bit short-staffed, so I was able to get down and dirty and dig deep into a slew of new short sale packages that had been submitted to our office for negotiation. It was a busy day, and I left in the afternoon when my head started spinning (not quite as bad as Linda Blair’s head spin in The Exorcist).

When I got home and was sharing little nuggets of my day with my family, my husband said that my day seemed kind of like something you would see on that new television program Undercover Boss where CEOs of major organizations go undercover and do menial jobs in order to learn more about all aspects of their organizations. The only difference here is that I still have it. I am awesome at the detail work required for short sales.

Are you awesome at working short sales? I bet you are!

I had the privilege of being able to triage the short sale packages and prepare them to be sent to the bank. This, my friends, is no easy task. You do not just throw 80+ pages into a fax machine and hope that the major lending institutions can figure out what’s what. Each and every page needs to be reviewed carefully and ordered clearly and accurately.

For most major lending institutions, these are the items that are required for the short sale package: an authorization to speak to the bank, a listing agreement, a purchase agreement, a hardship letter, a financial statement, pay stubs, bank statements, tax returns, and an estimated settlement statement. The list is clear cut and pretty consistent among all lending institutions.

However, the packages I reviewed were not quite so clear cut. Many were missing random items, but more than half were missing critical information about the mortgage loans (something that is necessary for any short sale to occur). Apparently, it is very common for folks in financial distress to begin to ignore their mail. Two or three packages had mortgage statements from 2008, and a lot can happen in a year and a half! Loans can be sold and resold. Loan numbers can change. For example, Countrywide and Bank of America just overhauled and changed many of their loan numbers. Without the loan number, it is impossible to begin the short sale process.

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So, here’s what you need to do if you do not have a loan number. (By the way, it sounds way easier than it is!) The seller needs to call the bank where s/he believes the mortgage loan is currently serviced. S/he needs to provide a social security number to the customer service representative and hope that the customer service representative can use that information in order to locate the loan number in the bank’s computer system. For one specific short sale package yesterday, I spent 57 minutes on the telephone with the seller and the mortgage lender trying to determine the loan number—just so that we could submit the short sale package!

It is truly important to be thorough and detailed when you work a short sale transaction. Qualify your seller, and collect all of the pertinent information (which may mean a 57-minute call to the bank). Reviewing paperwork and presenting your short sale package to the bank in an organized manner will certainly help to facilitate any short sale approval!

Written By

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.



  1. Christine Rich

    February 23, 2010 at 7:45 pm

    Melissa, I always look forward to your articles. Do you happen to know if there is any resource in Virginia that I can access to help with short sale listings? If not, or in any case, I’ll have to continue waiting for your next installments….

  2. Brian Fieldman

    March 2, 2010 at 2:37 pm

    I did the paperwork on my first short sale myself. I could handle everything, but I found out to my dismay that a statement of account from a HOA, even including legal fees, does not guarantee that there aren’t other legal fees waiting to pounce once you request a “demand statement.” We were $959 over our so called estimated HUD statement to the short seller bank and they were ready to cancel the deal. Guess who paid the $959 out of commissions. Yep, the other agent and I.

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