In order to process a short sale, you must provide a host of personal financial information. It is important that you be thorough and honest with the information you provide to avoid any implication that there was fraud or deceit involved.
One consideration in the decision to conduct a short sale is based on whether the homeowner wishes to let the Short Sale Lender know what their complete financial position is. For homeowners with sizeable assets, it is a fair argument that they may be giving the lender knowledge that pursuit of a judgement is in the bank’s best interest. Keep in mind that even though you must disclose your retirement funds, under federal law they can not be touched by the collections process without your permission. Once we remove the qualified retirement funds from the calculation, it is rare that we find a homeowner with enough assets that might tempt a bank to roll the dice on an expensive lawsuit with an uncertain outcome.
For those that chose to proceed, they will be asked for all or some combination of the following documents:
- A Hardship Letter (we have samples to get you started)
- A Financial Worksheet detailing monthly income and expenses (much like a budget)
- Paystubs for regular employees or a Profit & Loss Statement for the self-employed
- Checking and Savings bank statements
- Tax Returns (typically just the 1040 form)
- IRS form 4506-T (allowing the lender to request tax information directly from the IRS)
Providing this documentation is often the most difficult part of the process for homeowners. However, we can help you complete the documentation and it usually takes less than an hour.