I will say that I have not seen very many banks going after a seller's 401K. They tend to pay more attention to cash on hand, liquid assets, not your retirement accounts. But PNC, well, that's another story. Much depends on which bank holds your loan and who those investors are and the guidelines from the PSA.
Regardless of what you hear, each short sale is unique.
Lyon Real Estate
Sacramento Short Sale Agent
But just with bankruptcy, where you declare ALL assets including retirement accounts, it's rare if they would ever ask for any to be cashed out (before you are of retirement age) in order to satisfy a debt.
But as agents, we need to bring a little reality to our world. There was a day where you needed to come to the table with a check, when you were selling a home for less than what was owed. If the sellers can't, they need to come, hat in hand, explain their hardship, and show all their cards relating to their finances in order for the investor to settle for less than what's owed.
I have heard that your retirement account is NOT fair game for most short sale lenders. However there are always exceptions, like if you are nearing retirement or even retired and you have access to the retirement accounts. In those cases it would seem reasonable for a short sale lender to look at your retirement account.
I probably would provide the information and say no if they want funds from your retirement account.
Sam Yee, CA DRE #00975946
Accredited Buyer Representative, ABR
Certified Negotiation Expert , CNE
Short Sale & Foreclosure Resource, SFR
From what I understand (this is my opinion NOT case law to be used in a trial) even if they view your RETIRMENT STATEMENT such as a 401k 403B type investment tool they can not count that as Liquid Asset. AN eTrade stock account which can be liquidated at anytime (with tax penalties of course) or Checking/Savings account is what they are looking to establish in a Short Sale or Loan Mod situation. Those are the funds they have a right to consider in your case.
Hope this helps. Again let us know if you need a good referal source for Real Estate Attorney input in the Sacramento area.
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Eli Givoni, Director
Short Sale Department, LLC
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Lots of good advice.
I recently helped a buyer with financing on a short sale and the bank required the seller to sign an unsecured note for $15,000 as a condition of the short sale approval.
Every situation is unique. Be prepared and willing to provide whatever they ask you to provide, if you seriously want the lender to consider your short sale request.
Cobalt Financial Corporation
I don't think this is the forum for your answer.
I love Elizabeth Wen... she is awesome and sharp with her real estate knowlege. I don't think she got that knowledge by demanding people to give her information by chapter and verse of the law, Fed & State of California as you have requested.
I'm sure she has attended classes, seminar, read books, read case law, spoke to several lenders, attorneys, etc She may have lost sleep, missed a party or two to get the knowledge that she has. You know she probally read the buyers loan documents (from front to back) from every bank that exists today and the one we no longer see. She has probally taken Foreclosure 101 class 2-3 time before the crisis, and several times in the crisis.
With all this I'm saying you need to do the same. Learn and find out for yourself!
WHILE YOU ARE LEARNING:
Why don't you find for me chapter and verse of the Fed and State of California that says that THEY HAVE TO DO A SHORT SALE.
If you are in a situation find a way to negotiate a way for them NOT to not take/ask for the money. They may just want to simply just LOOK at it.
OK, I'm done Peace to ALL! ; )
There have been many, many short sales closed this year with people making millions in our area, but have a justifiable hardship.
If your clients or yourself can prove the hardship, disclose all the information and not worry.
It never benefits anyone to "hide" assets or funds.
I would check with the Department of Real Estate or contact Consumer Affairs in Sacramento.