Home Buying in Oakland>Question Details

Honeytoast4u, Home Buyer in Oakland, CA

what does that mean when the bank is asking the seller for documents does that mean im closer to an approval on a short sale?

Asked by Honeytoast4u, Oakland, CA Tue Nov 22, 2011

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Because the sellers typically owes more money on the property than what he's selling it for, his lender has to approve the price, terms and conditions.

There are so many things required i this transaction. Typically, the short sale lender needs the following from his selller
Hardship letter to prove the reason for his distress and why he needs to sell
Financial statement -- showing how much he makes, compared to his expenses
Most recent pay stubs or sources of income (the info needs to be updated more than once)
Most recent bank statements (savings, checking, etc)
Last 2 income tax returns
Request for Approval of Short Sale (RASS) to match exactly what it says on the HUD closing statement
HUD closing statement showing details about the sale, closing costs, pay offs
Affidavit of arms length transaction among the buyer, seller and their agents
Copy of the listing agreement
Copy of the purchase agreement
Authorization from seller to his agent to communicate with the short sale lien holders
Comps to justify list/purchase price

And if there is more than one seller on the loan, the same will be requested of the other seller. This can be requested of divorced/separated couples even if one of them has given a quit claim deed. The quit claim deed doesn't necessarily absolve the person from the loan obligations.

As such...yes it can and will take some time to pull this all together.

Hopefully your own realtor has adequately prepared you on what to expect from a short sale purchase?
0 votes Thank Flag Link Sat Nov 26, 2011
It simply means the bank is asking for more information. That’s it. You ARE closer to an answer of some kind simply because another day has passed. When the bank starts countering with terms and pricing in writing … then you know you are actually getting close to the end.
.
0 votes Thank Flag Link Wed Nov 23, 2011
That would be great wouldn't it. Unfortunately, it simply means they are doing their due dilligence. And even when they have recevied all the paperwork, it still does not mean they will accept the short sale and may still be asking for a 'contribution" from the seller. Not sure if you are handling this by yourself. But the first requirement is to make sure you have all the paperwork ready and done. And depedning on how fast ( read slow) they work, they may ask for the same paperwork 3 months later, becuase by then, the paperwork has expired. Maybe you should talk with a good real estate agent.
Good luck.
Antoine
0 votes Thank Flag Link Tue Nov 22, 2011
Short Sales usually take a while to close depending on lender. When they are requesting documents, that is good because they are staying in communication meaning they are working your file. Usually bank statement, pay stubs are what they ask for throughout the negociation of the shortsales, my advise to you as a former negociator and processor of short sales and loan modification, throughout the process until closing always have these documents available that will expedite the process of your short sale.
Web Reference: http://www.vrtmg.com/dtania
0 votes Thank Flag Link Tue Nov 22, 2011
It is a good sign when the bank is asking for documentation. But that does not mean they are going to approve your price as a buyer or even the short sale itself. They will do their due diligence, get appraisal or BPO (Broker Price Opinion) and keep requesting more and more documents from the seller and even from the buyer until they have satisfied themselves that it makes sense to do a short sale instead of a foreclosure.

The key is to be patient and most of the short sales do go through. However, I am seeing tht the Banks are becoming adamant about the price they want for the property and they will not give in even when there may be a cash offer.

Meena Gujral
http://www.helpusellachievers.com
925-425-9491
0 votes Thank Flag Link Tue Nov 22, 2011
Hello,

Short sales are still hard to predict but the fact that there is communication going on, that is usually a good thing. Common docs requested from a seller are usually the last two bank statements, check stubs, tax returns, pretty much all paperwork proving they can not make payments on the mortgage so they should allow the short sale to proceed. Please feel free to call or email me if you need further information.
0 votes Thank Flag Link Tue Nov 22, 2011
Hello,

When a short sale bank is asking for more documents that usually indicates they are working on the file. Communication from a short sale bank is promising because that means the short sale process is moving along. Usually when there are more requests for documents, the bank is getting closer to give s short sale approval letter. Short sale buyers that patiently wait through the short sale process will have the benefits buying at a great time with lower prices and affordable mortgage rates.

Thanks,
Carol Perdew
Prudential California Realty
(209) 239-7979
Carol@PerdewHomes.com
http://www.CentralValleyHomes.com
DRE 985176
0 votes Thank Flag Link Tue Nov 22, 2011
Yah, Aaron is right. No news is not good news so at least you know something is happening. Depending on how long this process has been going on, the lender may want updated statements from the seller or there was something missing from the original request.

Best Regards,

Eric Soderlund
0 votes Thank Flag Link Tue Nov 22, 2011
Any time there is communication with the negotiator, it is a good sign. The reality is, it doesn't mean you're closer to an approval. It is when you go for long lengths without communication that you should be a little more worried. Good luck. Patience is the name of the game.
0 votes Thank Flag Link Tue Nov 22, 2011
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