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Hi we were one week away from closing on a new home when the lender contacted us and said that we have not met the required minimum three year after short sale. He told us we have to wait until the end of August to close on our new home. The builder will not hold the house for five months, now the loan officer wants a letter of extenuating circumstances to try and get our loan through underwriting. Does anyone have a letter you can share as an example of what I need to write? thank you.
You need to ask your lender SPECIFICALLY what they are looking for in this letter. It may also require getting documentation from the builder regarding when they expect closing to happen. The lender should be able to tell you exactly what the underwriter is looking for.
Depending on who the investor is but I am GUESSING Fannie Mae since they recently extended the post short sale wait...
Anyway. These letters are no longer the perfunctory say-what-they-want-to-hear explanations of the past so no one can really give you a sample. It must be a complete explanation of WHY it happened, what caused it, all the factors that led up to the short sale (and they must be unusual, no chance of happening again).
This is an excert from Fannie Mae on the matter:
"Extenuating circumstances are nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.
lender must substantiate the borrower’s claim. Examples of documentation that can be used to support extenuating circumstances include documents that confirm the event (such as a copy of a divorce decree, medical reports or bills, notice of job layoff, job severance papers, etc.) and documents that illustrate factors that contributed to the borrower’s inability to resolve the problems that resulted from the event (such as a copy of insurance papers or claim settlements, property listing agreements, lease agreements, tax returns (covering the periods prior to, during, and after a loss of employment)..."
Hi we were one week away from closing on a new home when the lender contacted us and said that we have not met the required minimum three year after short sale. He told us we have to wait until the end of August to close on our new home. The builder will not hold the house for five months, now the loan officer wants a letter of extenuating circumstances to try and get our loan through underwriting. Does anyone have a letter you can share as an example of what I need to write? thank you.
Why did you have to short-sell the house? You'll need to document the reason.
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