Short sales

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Update 3-3-2012:  List of ways Sellers can interfere with short sale transactions includes getting behind on mortgage payments and not cooperating with your lender.  Check many of the ways here:  http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2012/03/ask_a_real_estate_pro_how_not_1.html

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Update:  2-18-2012:  US Senate Bill (S.2120) and House Bill (HR 1498) proposed to require decision from lenders within 75 days whether or not they will approve a short sale. 
Source:  http://www.prweb.com/releases/2012/2/prweb9191026.htm

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I think most people have an idea of the definition of short sale (i.e., selling a property for less than the amount of the loan(s) payoff).

An interesting side note to short sales is that many lenders are paying" sellers to sell their home under a short sale or just leave their homes, but in good shape.

Source 1:  http://www.dsnews.com/articles/major-lenders-offering-perks-on-short-sales-2011-07-28

Source 2:  http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2011/06/chase_borrowers_getting_cash_t_1.html

I'm not an agent who lists or negotiates the settlement of short sale properties between banks and borrowers, nor did I sleep in a Holiday Inn recently, but aside from the SAFE Act of 2008 (which outlines licensing requirements of loan originators and others in the mortgage industry more qualified to discuss loan modifications), I have seen and read some expectations:

Here are the IRS' Ten Facts for Mortgage Debt Forgiveness on what is normally taxable income - forgiveness of mortgage debt - http://www.irs.gov/newsroom/article/0,,id=205004,00.html

Here are some potential things to expect to produce, create, or see when running numbers or negotiating with the bank...

1.) preliminary net sheet - shows what the homeowners' may receive upon the sale of property, net of any outstanding debts and other fees ---- usually zero these days!

2.) hardship letter - succinctly describes facts surrounding homeowners' situation and addresses why they are forced to pursue short sales,

3.) proof of income and assets - facts disclosing your finances and assets to prove the homeowners can't afford to meet their mortgage payments or payment of the loan, and

4.) bank statements/financial records - show deposits and withdrawals homeowners have made using their bank accounts and disclosure of financial assets.  (i.e., Can the afford and just don't want to pay?)

Source:  http://www.stockmarketsreview.com/realestate/2011/06/30/real-estate-short-sales/%20

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