EXAMPLE #1: Santa Rosa Beach Florida Short Sale

   “ Please be advised, that before we discuss the closing costs you have to talk to the sellers regarding contribution to mitigate the loss.

  The reasons:

 * FICO in the high 700, never late on any account, continue to make payments on all credit cards

 * good deposits

 * good income on tax returns

  Requested contribution: Promissory note of 12,000, payable in 8 years, 125 per month, 0 interest.”

   EXAMPLE #2: Destin Florida Short Sale

  “Seller is currently paying off a car at 453.00 per month and several credit cards paid on time, Seller is getting deposits of 3000 and 2500 every other weeks on her bank accounts. I’m sure she can afford 333.33 per month.

 The note is 0% interest for 5 years at 333.33 per month.  There is no way we are releasing the liens debts over 684K without the seller contribution.”

 Both of these examples show how financial information is scrutinized by the short sale lender.   Apparently, good credit, few delinquencies and regular income make the seller a candidate for contributing to the shortfall. In other cases, the lender, servicer, or mortgage insurance company may request a contribution due to its loss amount or policy.   It is best to prepare your seller in advance.

  Join Wendy Rulnick and Broker Bryant in our next Short Sale Basics Webinar, July 11, 11:00 a.m. Eastern.  We’ll discuss Seller Hardship and have fun dissecting Financial Worksheets.

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

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The post Why Short Sale Lenders Ask for Promissory Notes – Destin FL first appeared on Rulnick Realty.

Today I got a call from a short sale seller.  He already listed his house with another Realtor, but had read my blog and wanted to tell me about his scenario.  I think he wanted an “ear” to listen to his story, and give him some reassurances.  I was happy to oblige.  The gentleman had done a cash-out refinance on his house several months earlier- receiving about $15,000 back from the transaction.   Since then, his fortunes had plummeted, his roommate had moved out, and he could no longer afford his mortgage payments.  His mortgage was backed by FHA, and he told me his lender had given him an acceptable price at which the property could sell.  He got lucky, and now has an offer.  His short sale package is at the bank awaiting approval.  His fears were that he had taken out the $15,000 cash from the refinance, and that based on that, his short sale would not be approved.  He said his file was in line for review, and he wanted to “do the right” thing and write a letter stating that he would pay back the extra $15,000 in the form of a promissory note, as he has no savings. He asked me if I thought that would help his case.  Sure, perhaps the lender would approve his short sale without a promissory note, or perhaps they would reject the offer, or maybe they would ask for a lump sum payment.  But what he wanted to do, to make things right with his conscience and his personal code of conduct, was to pay back that money.  And that’s what he is doing.

The post Short Sale Seller Does the "Right" Thing first appeared on Rulnick Realty.