Skate Through Your Short Sale

One of the junior members of my family landed in the emergency room the other night—a skateboard trick gone awry. The triage nurse was asking question after question after question. “Did you hit your head? Did you lose consciousness? Did you black out?”

I was a little bit intolerant of the nurse’s incessant questioning because I felt that it had absolutely nothing to do with the mangled limb. However, her questions did prompt me to think about the triage of short sales.

When you take a short sale listing or begin to process your short sale transaction, you also need to do a bit of triage—not unlike my recent experience in the ER.

First off, it helps to know whether the property is owner-occupied. Investor owners participating in short sales, for example, will not qualify for certain programs (such as the government’s short sale program, HAFA).

It’s also helpful to know whether Fannie Mae or Freddie Mac is the investor. You can determine that by visiting the Fannie Mae and Freddie Mac websites and using their loan lookup tools. Both of these GSE’s have their own versions of the HAFA program. Familiarizing yourself with the guidelines for submission for each of these programs will really go a long way toward the successful processing of the short sale.

Generally, it is also good to know whether the seller has attempted to qualify for a loan modification. Sometimes the mortgage lender may still be in the process of evaluating the short sale seller for the loan modification. A good listing agent will want to have all of the facts at his or her disposal before contacting the bank to hear that the seller is still in the midst of the modification.

And, of course, it is also helpful to know how many liens there are on the subject property. Collecting mortgage statements and then comparing those statements to information on a preliminary title report will assure that whomever is conducting the short sale negotiations is obtaining lien releases from all of the necessary lien holders.

Sometimes agents phone me to discuss their short sales and I begin to ask them a barrage of questions—not unlike the triage nurse did at the hospital the other night. However, unlike the triage nurse, I do not offer pain medication as part of my service—despite the fact that there are probably a few agents out there who are working on some pretty painful short sales.

Photo: flickr creative commons by TenSpeed Photography