Short sales, short sales, short sales. They are everywhere. Many Bradenton - Sarasota, Florida homeowners are facing the risk of foreclosure in our declining market. For some, a short sale may be the solution. This is the 9th in a series of articles to help Bradenton, Florida homeowners understand short sales.

When you go through the short sale process your lender will require certain documentation.

Remember, the lender does not want to take the home back through foreclosure. That is a last resort for both the homeowner and the lender. The lender would rather accept a short sale as long as the borrower can show an inability to pay the mortgage.
Each lender has their list of required documentation. Therefore, the first step is to give your Realtor signed authorization to speak with the lender about your account. (See below for a sample authorization letter.)

Your Realtor will then request a "short sale package" from the lender. Most lenders require the following documentation.

• Hardship letter. A handwritten letter may be better to explain the borrower's situation and requesting a short sale. It should describe why the borrower cannot make their mortgage payments and their fear of possible foreclosure. It should be a plea for the lender to consider a short sale.
• Two years of tax returns and W-2's. Remember to provide signed copies of tax returns.
• Signed IRS Form 4506 "Request for Copy of Tax Form". This is so that the lender can verify that the submitted returns actually match the originals sent to the IRS.
• Two most recent bank statements and retirement account statements. Be sure to copy both side of double-sided statements.
• Two most recent pay stubs

• Current debt, payments and a household budget
• Documentation supporting the hardship (termination of employment letter, disability letter, doctor bills, etc.)
• A current Comparative Market Analysis (CMA) from a real estate broker or appraiser
• Estimated net sheet from a title company. The settlement statement will show all of the expenses related to the sale with the seller receiving zero.
• A copy of the executed sales contract with buyer's proof of funds or loan commitment.

Never submit an incomplete package. Some lenders receive hundreds of requests a day. It is not uncommon for a loss mitigator to have 200 - 400 files in which they are working. Incomplete packages will be set aside and you will have to start over again.

Dan Forbes is the broker/owner of Premier Team Inc., Realtors, in Bradenton, Florida. He has assisted over 1000 Bradenton, Florida real estate buyers, sellers, and investors. He is also president of the Bradenton Real Estate Club. BradentonFloridaRealEstate.com and TheRealEstateZoo.com Dan is an author, speaker, and seminar leader as well as an active Realtor working with Buyers and Sellers.

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