short saleWhen you decide to sell your home as a short sale, it’s not just making the decision. Your bank or lender also has to agree to accept a short sale. This is because in a short sale, you are paying off your mortgage to them with whatever you get in the short sale. They need to accept that whatever the home fetches in a short sale is worth the remaining amount of your mortgage. If they do not want to accept that, they can decline your short sale.

If your short sale is declined, there are a couple of things that you can do. One of the first things you can do if your short sale offer is declined, is ask to speak to a supervisor. It can often be the case that the person handling your file is a lower-level employee and you can often get results by speaking with someone higher up, and who has more authority.

Depending on investor guidelines, you might be required to be in default or under threat of foreclosure before qualifying for a short sale. If you are making your mortgage payments, you might not qualify for a short sale, even if there are other hardship factors at stake. It’s a good idea to ask if the guidelines for a short sale require that your mortgage be in default. In that case, you might need to stop making mortgage payments before you will qualify for a short sale.

Another reason you might be declined for a short sale is because your assets are high and our liability is low. If you have a lot of money in savings, they may not approve you for a short sale under the assumption that while you could pay for your mortgage, you are simply choosing not to do so. In this situation, it is sometimes a good idea to pay down debt and resubmit your short sale application to your lender with a lower balance.

If the bank determines you do not have a hardship because it hasn’t been documented yet, for example, something like an expected layoff, it can be a good idea to rewrite your letter of hardship. It’s also wise to have your agent write it on your behalf. You can also consider making the offer of a seller’s contribution in order to help offset the bank or lender’s loss on the home.

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This is filed under Short Sales.

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