Can you sell your house as a short sale if you can still make the mortgage payment?

[golfer]

My wife and I visited a house today in Carlsbad that is listed as a short sale. The owner gave us a tour and is also a realtor. He is moving out of the country and thus the reason for selling. He claims that his situation is not a typical short sale situation because he can afford to make his mortgage payment.

My question is why would the bank agree to a short sale if the guy can and will continue to pay his mortgage?

A side note, he claimed to have received 4 offers (after 20 days on the market) and one of them is close to his asking price (which is of course his best estimate and not a price approved by the bank).

[NotCranky]

A Lender might do it but usually proof of a “hardship” is required. I think this requirement comes from the need for the lender to have a case for any PMI, for maintaining credibility with investors and maybe because regulators could have a say so in it. It would also be a bad business practice for it be too easy. In this day and age though, who knows to what extent good business practices have to do with anything.I believe shortsales will get easier soon, for some time going forward.Maybe they already are with some lenders?

[NotCranky]

A Lender might do it but usually proof of a “hardship” is required. I think this requirement comes from the need for the lender to have a case for any PMI, for maintaining credibility with investors and maybe because regulators could have a say so in it. It would also be a bad business practice for it be too easy. In this day and age though, who knows to what extent good business practices have to do with anything.I believe shortsales will get easier soon, for some time going forward.Maybe they already are with some lenders?

[NotCranky]

A Lender might do it but usually proof of a “hardship” is required. I think this requirement comes from the need for the lender to have a case for any PMI, for maintaining credibility with investors and maybe because regulators could have a say so in it. It would also be a bad business practice for it be too easy. In this day and age though, who knows to what extent good business practices have to do with anything.I believe shortsales will get easier soon, for some time going forward.Maybe they already are with some lenders?

[NotCranky]

A Lender might do it but usually proof of a “hardship” is required. I think this requirement comes from the need for the lender to have a case for any PMI, for maintaining credibility with investors and maybe because regulators could have a say so in it. It would also be a bad business practice for it be too easy. In this day and age though, who knows to what extent good business practices have to do with anything.I believe shortsales will get easier soon, for some time going forward.Maybe they already are with some lenders?

[NotCranky]

A Lender might do it but usually proof of a “hardship” is required. I think this requirement comes from the need for the lender to have a case for any PMI, for maintaining credibility with investors and maybe because regulators could have a say so in it. It would also be a bad business practice for it be too easy. In this day and age though, who knows to what extent good business practices have to do with anything.I believe shortsales will get easier soon, for some time going forward.Maybe they already are with some lenders?

[SD Realtor]

The short sale package from the bank is generally pretty robust. It “could” ask for tax returns, complete asset and liability statements, a hardship letter, and pretty much all proof that the seller is facing a hardship. That said, it is completely up to the bank to accept or decline the short sale. Generally most banks will not entertain short sales until the seller is technically in default. Given that a notice of default does not happen until about 3 or 4 missed payments it would seem improbable that this guys bank will approve of the short sale. If he got a price near what he is asking I don’t know why he would not just take the offer rather then deal with the short sale. Also not all short sales that are accepted by the bank are done with a “walk away from the loan” note to the seller. Some banks will actually only accept the short sale if the seller signs a promissary note to the bank for the deficiency. Now that means the home still conveys but that the seller still owes money to the bank. The loan so to speak is not secured by a property anymore.

Ask you agent to call the agent for the seller to see if the seller has indeed sent in the short sale package yet. If he did get all the offers he claims then he should of sent the full package in.

[SD Realtor]

The short sale package from the bank is generally pretty robust. It “could” ask for tax returns, complete asset and liability statements, a hardship letter, and pretty much all proof that the seller is facing a hardship. That said, it is completely up to the bank to accept or decline the short sale. Generally most banks will not entertain short sales until the seller is technically in default. Given that a notice of default does not happen until about 3 or 4 missed payments it would seem improbable that this guys bank will approve of the short sale. If he got a price near what he is asking I don’t know why he would not just take the offer rather then deal with the short sale. Also not all short sales that are accepted by the bank are done with a “walk away from the loan” note to the seller. Some banks will actually only accept the short sale if the seller signs a promissary note to the bank for the deficiency. Now that means the home still conveys but that the seller still owes money to the bank. The loan so to speak is not secured by a property anymore.

Ask you agent to call the agent for the seller to see if the seller has indeed sent in the short sale package yet. If he did get all the offers he claims then he should of sent the full package in.

[SD Realtor]

The short sale package from the bank is generally pretty robust. It “could” ask for tax returns, complete asset and liability statements, a hardship letter, and pretty much all proof that the seller is facing a hardship. That said, it is completely up to the bank to accept or decline the short sale. Generally most banks will not entertain short sales until the seller is technically in default. Given that a notice of default does not happen until about 3 or 4 missed payments it would seem improbable that this guys bank will approve of the short sale. If he got a price near what he is asking I don’t know why he would not just take the offer rather then deal with the short sale. Also not all short sales that are accepted by the bank are done with a “walk away from the loan” note to the seller. Some banks will actually only accept the short sale if the seller signs a promissary note to the bank for the deficiency. Now that means the home still conveys but that the seller still owes money to the bank. The loan so to speak is not secured by a property anymore.

Ask you agent to call the agent for the seller to see if the seller has indeed sent in the short sale package yet. If he did get all the offers he claims then he should of sent the full package in.

[SD Realtor]

The short sale package from the bank is generally pretty robust. It “could” ask for tax returns, complete asset and liability statements, a hardship letter, and pretty much all proof that the seller is facing a hardship. That said, it is completely up to the bank to accept or decline the short sale. Generally most banks will not entertain short sales until the seller is technically in default. Given that a notice of default does not happen until about 3 or 4 missed payments it would seem improbable that this guys bank will approve of the short sale. If he got a price near what he is asking I don’t know why he would not just take the offer rather then deal with the short sale. Also not all short sales that are accepted by the bank are done with a “walk away from the loan” note to the seller. Some banks will actually only accept the short sale if the seller signs a promissary note to the bank for the deficiency. Now that means the home still conveys but that the seller still owes money to the bank. The loan so to speak is not secured by a property anymore.

Ask you agent to call the agent for the seller to see if the seller has indeed sent in the short sale package yet. If he did get all the offers he claims then he should of sent the full package in.

[SD Realtor]

The short sale package from the bank is generally pretty robust. It “could” ask for tax returns, complete asset and liability statements, a hardship letter, and pretty much all proof that the seller is facing a hardship. That said, it is completely up to the bank to accept or decline the short sale. Generally most banks will not entertain short sales until the seller is technically in default. Given that a notice of default does not happen until about 3 or 4 missed payments it would seem improbable that this guys bank will approve of the short sale. If he got a price near what he is asking I don’t know why he would not just take the offer rather then deal with the short sale. Also not all short sales that are accepted by the bank are done with a “walk away from the loan” note to the seller. Some banks will actually only accept the short sale if the seller signs a promissary note to the bank for the deficiency. Now that means the home still conveys but that the seller still owes money to the bank. The loan so to speak is not secured by a property anymore.

Ask you agent to call the agent for the seller to see if the seller has indeed sent in the short sale package yet. If he did get all the offers he claims then he should of sent the full package in.

[sdrealtor]

Both responses above are not accurate. Short sale packages from most banks are pretty cursory IMO. Short sales can and do happen when there are no late payments and the seller can make the payments. I closed one such transaction last week and another will close next week. The key is understanding how to negotiate them properly with the lenders and why I will likely have a career year in 2009.

[sdrealtor]

Both responses above are not accurate. Short sale packages from most banks are pretty cursory IMO. Short sales can and do happen when there are no late payments and the seller can make the payments. I closed one such transaction last week and another will close next week. The key is understanding how to negotiate them properly with the lenders and why I will likely have a career year in 2009.

[sdrealtor]

Both responses above are not accurate. Short sale packages from most banks are pretty cursory IMO. Short sales can and do happen when there are no late payments and the seller can make the payments. I closed one such transaction last week and another will close next week. The key is understanding how to negotiate them properly with the lenders and why I will likely have a career year in 2009.

[sdrealtor]

Both responses above are not accurate. Short sale packages from most banks are pretty cursory IMO. Short sales can and do happen when there are no late payments and the seller can make the payments. I closed one such transaction last week and another will close next week. The key is understanding how to negotiate them properly with the lenders and why I will likely have a career year in 2009.

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