Once a borrower (homeowner) submits the required income and asset documentation to their loan servicer, and an offer and proposed settlement statement has been provided to the lender, a Short Sale Approval will be issued.  What is in the letter will differ from lender to lender, and often, the "devil is in the details."

Generally, the Approval Letter will contain the Terms & Conditions of your short sale approval.  It will most likely be generated by the negotiator on your file - the person who communicates between your authorized third party and the investor/owner of the loan.  Among the key items in the approval are:

  • Minimum net proceeds your servicer will accept
  • Closing date - the date you must close by with your Buyer to preserve the approval (Note: the date can be extended in most cases)
  • Commission - how much the lender is willing to pay your Realtor at closing (you pay nothing out of pocket)
  • Acceptable Settlement Charges - this may be broken out as to line items on a proposed HUD-1 Settlement Statement, or may be rolled up into one total
  • Credits to Subordinate Liens - How much your servicer will credit junior liens, e.g. second loans, lines of credit, etc.
  • Borrower Incentive - Amount the lender will issue a check for HAFA eligible borrowers
  • Closing and Wiring Instructions - this is for your closing agent (title co. or attorney) to send the funds out from closing to your lender

We've included some real examples below from past clients.  The confidential information has been struck, but these are actual Short Sale Approval letters we have assisted our clients in obtaining:

If you are interested in learning more about foreclosure alternatives and getting to a Short Sale approval letter as the clients above did, please Contact Us.