Required Documentation in a Short Sale

A short sale is the sale of a property for less than the total amount necessary to satisfy the mortgage obligation resulting in a shortfall. Lender requirements for agreeing to a short sale may differ from institution to institution but the following may be required:

• The original completed Form 1126, Borrower Financial Statement
• The original signed borrower's letter of explanation and documentation of involuntary inability to pay.
• A copy of the borrower's two most recent paystubs or vouchers indicating year-to-date earnings
• A copy of the borrower's signed federal income tax return for the previous year, with all schedules
• A copy of the listing agreement
• A copy of the fully executed sales contract with addenda stating that the property is being purchased in "as-is-condition and conditional upon lender approval
• A breakdown of the seller's estimated closing costs

ELAINE RICHER - TRAINER & CONSULTANT