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Many turn to short sale to save their property from foreclosure. However, short sale is not as easy as it seems. There are several steps that have to be taken before an approval from the lender will be acquired. What is a short sale? A short sale happens when a property owner decides to sell the property and its value happens to be less than the value of the remaining balance of his loan. This is what makes it difficult to get approved. The lender has to be careful in his decision because he will lose significant amount if he agrees to it. Once he agrees to it, he will receive a discounted payment for the borrowed amount.
In order to get the approval of your lender, you have to be prepared. You should not only prepare your hardship letter but the rest of the requirements as well. Make sure that your package is ready. You should also familiarize them so that you will be able to answer the questions raised by your lender. You have to be ready so that you will not waste a good short sale package.
The first thing you need to do is to call your lender. There are systems that direct you automatically to the loss mitigation department. If your lender does not have this, make sure that you get to the right department. You have to introduce yourself first and talk to them politely. Let them know that you are interested in a short sale arrangement.
If you get an appointment with a mitigation officer, you should know what to expect. He will most likely tell you about the losses the firm will incur if he approves your package. You have to be patient and polite as he speaks. However, you have to look professional as well. It is essential that you know how to present your package so that the mitigation officer will see it from your perspective. This is also another reason why you have to complete all the requirements first.
You should prepare your answers as well. It would be best if you practice before the meeting or come up with a good script. Be prepared to provide more information if requested by the lender as well. However, see to it that you have the hardship letter, the financial statement, the Authorization to Release Information, the purchase and sale agreement and the estimated HUD1.
It would be best if you put yourself in the lender’s shoes. Consider the state of the real estate market today. The number of foreclosed property is high. This means that the lender is could be handling a lot of foreclosure issues. You can use this when you negotiate. Highlight what the short sale would do for them. It will eliminate the need to market the property when they foreclose it. This will also get rid of the expenses caused by the foreclosure processes too.
Short sale offers a lot of benefits; however, your lender will not approve it that easily. There are several things you have to do and prepare to ensure that you get the approval. First, prepare all the requirements. Make sure that you prepare for the conversation with the mitigation officer as well. This will increase your chances of being approved.
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