How much of my savings can a lender take in a short sale of my home?

Asked by Short Sale Seller, Los Angeles, CA Sun Jan 1, 2012

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Daniel Klein, Agent, Beverly Hills, CA
Thu Jan 5, 2012
Absolutely nothing. Your savings and 401k are fully protected. If you can demonstrate a true hardship, then the lender will approve your short sale.
Be sure to request something from the lender that will absolve you from future deficiency claims. Under California Statute this is currently illegal, but I know lenders and their legal teams will devise a work around.

Daniel Klein
Over 1 Billion Sold
0 votes
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Mon Jan 2, 2012
Short Sale Seller:

As long as you have a qualifying hardship and the bank approves the short sale, you are protected by law in the State of California, from having to contribute any of your savings. Unfortunately, there are some lenders out there who will not approve a short sale if you have "substantial" savings. This was defined to me by one lender as "more than three times the monthly payment". On the other hand, I have had short sale approvals issued for sellers with significantly more savings than that. The lender's rules and parameters for approving a short sale seem to be a moving target. Make sure your agent is in constant communication with the lender and keeps you advised of the developments in your case. Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
SSG Pro®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
424-2HELP12 (424-243-5712)
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Sara Mehrpou…, Agent, Los Angeles, CA
Sun Jan 1, 2012
Short sale is like a settlement with the lender. The lender will not automatically take any part of your savings. Every situation may be different in some way. If the property is your primary residence then you might want to try the HAFA short sale:
HAFA short sale does not allow for any money coming from the short seller and you should receive $3000 for relocation assistance. I've completed some HAFA short sales for my clients and they were happy.
The traditional short sale does not necessarily mean that they will require what we call a "seller contribution" either. Feel free to contact me with any questions. Good luck.

Sara Mehrpouyan CDPE
Specializing in Short sale & Foreclosure
Direct: 818-903-2040
Rodeo Realty
Dre License #01712757
0 votes
Steven Ornel…, Agent, Fremont, CA
Sun Jan 1, 2012
Short Sale Seller:

Please refer to the following:
"CA Senate Bill 458 Now Prohibits 1st/2nd+ Deficiency Judgments*"…

The law above prohibits the lender from asking/requiring the SELLER to provide ANY money towards the Short Sale deficiency in order for the Lender to approve the Short Sale - period. This includes if you have a 2nd, 3rd + or a cashed out equity line. See page 2 of and the summary table listed under “*12/09/11 Clarification Update:” at the bottom of the blog.

Review the following post if you are also concerned about your retirement savings:… target="_blank" rel="nofollow">…

0 votes
Leo Hill, , Los Angeles, CA
Sun Jan 1, 2012
A lender can't take any of your savings, but the lender can and will evaluate your saving when considering the shot sale approval. Even with a saving account ( I'm not aware of the amount ) you must demonstrate a legitimate hardship for the lender to approve a shot sale.
0 votes
Emily Knell, Agent, Huntington Beach, CA
Sun Jan 1, 2012
Do you have 1 or 2 loans? If you have 1 loan, you'll probably be asked to donate $0, if you have a 2nd & depending on the amount of the 2nd & if it was a cashed out equity loan, you may be asked to bring in some funds. Most of my short sale deals, however I alert the buyer to these factors up front. With negotiating a good purchase price, if a contribution is required, I can usually get the buyer to make the contribution.

I have closed 100% of the short sales I have listed. This is rare. On average agents are closing about 40% of the short sales they list.

Shoot me an email directly if you want to talk about this some more, I don't look back on this same Trulia thread for answers posted after mine.
562-430-3053 c
Realtor Since 1996
Main Street Realtors
0 votes
Richard "RJ"…, Agent, Beverly Hills, CA
Sun Jan 1, 2012
I specialize in short sales and most likely 0 from you, however, there are many factors to go over to determine this. I can definitely guide and council you. I am highly experienced and well known for shortsales. Please contact me for a free consultation.
0 votes
Elizabeth Ca…, Agent, Los Angeles, CA
Sun Jan 1, 2012
Depends on the your bank, but I've done several short sales this 2011 and the banks have given money to the owners to complete a short sale, from 3k to 30k.
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0 votes
Kathleen Bec…, Agent, Santa Monica, CA
Sun Jan 1, 2012
Hi Home Seller:

It is all negotiable depending on your financial status, assets, hardship and many other factors. It is most likely that they will not take anything, however, they may ask for you to pay for some of the deficit. Again, it is all negotiable.

I have worked with clients on short sales where the banks wanted them to kick in funds to close, and they said No...and the bank eventually said ok.

Hopefully you have someone that knows how to negotiate with the banks doing your short sale.

Good Luck!

All the best,

Kat Becker, Realtor
Prudential California Realty
0 votes
Richard Schu…, Agent, Los Angeles, CA
Sun Jan 1, 2012
There are many complications to this...likely they cannot take any, but it depends on a lot of different variables. Consult my resources page for more info, or call me for a consultation.

Richard Schulman
Short Sale Specialist
Keller Williams Realty
0 votes
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