My husband and I are looking into short selling our home. His name is the only one on the loan but both of us are on the title.

Asked by Sara, Alameda County, CA Sun Jul 25, 2010

My husband and I are looking into short selling our home. His name is the only one on the loan but both of us are on the title. When the bank wants to review financial statements to determine if we qualify for the short sale, will they look at just his or both of ours?

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Stacey Wilson, , Oakland, CA
Tue Aug 3, 2010
Technically, you would submit documentation for the person who is on the loan - which would be your husband. He is the one responsible for the loan and providing too much could hamper the approval process. They should not be considering someones income who has no obligation to pay them back.

With respect to the bank statements, many people have secondary persons on their account for access and other personal reasons.

The situation would need to be reviewed and really cannot be answered without looking at the whole picture, some of the questions I would have for example:

1. Even if you do submit your financials - are you still not able to meet the obligation of this mortgage? Why are you short selling? If you are selling due to hardship and difficulty paying the mortgage *including* your income, your financials may not hurt the outcome.

2. Even if your name is on the bank statement - it could be for access or other personal reasons

3. Joint tax returns: has there been a change in employment/income since this return was filed?
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Max Boyko, Agent, Sacramento, CA
Tue Jul 27, 2010
There are many factors that can play a role in this situation, and it would be best to sit down with a local professional and determine the right way to go. Many of the questions have been answered here it looks like, but make sure to always seek legal counsel in either way you choose to go.

Most of the lenders will be asking for household income. If you choose not to disclose your income to the bank there are always risks involved. If your income shows on joint tax returns then I do not think it will be an option no matter which lender you have.

Every lender also has their own procedures and requirements when it comes to completing a short sale. Some are much easier than others.
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Sue Archer R…, Agent, Palm Harbor, FL
Sun Jul 25, 2010
The first 'gate' that is required is to define a hardship as to why you are asking the lender to take less that what is owed on the sale of the home. Without a hardship, consider that the lender will require you and your husband to come to the closing table with a check for the difference. In some cases they might even consider a non-collateralized loan.

But assuming you qualify as having a hardship to have a short sale approved, and you only are having your husbands income considered, you must also delineate his expenses from your own. I think the answers, as always, will lie with your lender as to how they will evaluate this. Being that you most likely have a joint tax return, and joint bank accounts that will be submitted, you can't just claim one income and then claim all expenses....doesn't that make sense? You might want to think about how you provide an accurate picture of your financial hardship...either separately or jointly.

If you have an experienced short sale realtor, they may be able to join you in that conference call with your lender to see how to prepare the information best as to how that specific bank will evaluate it.
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Lisa Jonsson, Agent, Walnut Creek, CA
Sun Jul 25, 2010
Yes, since your husband is the only one on the loan, they will be asking to see his bank statements, tax returns, etc but not yours. However if you filed jointly, they will therefore be taking the joint tax return into consideration. I have a video on my website describing the short sale packet. Please see the link below.
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Jay Emerson, Agent, Fair Oaks, CA
Sun Jul 25, 2010
Please be careful about what you choose to not disclose, especially if asked. Shorted lenders are assigning borrowers to their lawyers.
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Norm Robert, , Elk Grove, CA
Sun Jul 25, 2010
Hi Sara,
Since only your Husband is on the loan the bank should only be using his documented income. If you were considering a loan modification then you may be able to use both (or either) depending on how the numbers work out. With a loan modification you can volunteer "non-borrower" income if you can show it is a normal part of the houshold income.
The short sale (or any other option you both decide is best) should not affect your credit. However, a foreclosure with an eviction would affect your credit as well.
The banks all have different rules and procedures and those procedures are often changing and evolving.
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Ute Ferdig -…, Agent, New Castle, DE
Sun Jul 25, 2010
Hello Sara. While they may be asking for "household" income, only your husband's income should count as he is the only borrower responsible under the loan. Most of the short sales I have done have different sections for borrower and co-borrower and in your case, the co-borrower side would be left blank. If you are filing your taxes jointly, they'll see your income anyway as they will want to get copies of the borrower's tax returns. They just won't see your current income. I hope this helps.
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