Short Sell - Bank needs Financial information (loan, approve, foreclosure)

[mdstlrfan]

Hi All,

We are in the process of trying to get HSBC to approve a short sell. We are the sellers. They are requesting financial information. Is there something paticuliar they are looking for? Do they just want to be sure we cannot afford the home or are they looking for assests to place judgements on? Any advice when as to what information to release and what not to?

Has anyone worked a short sell with HSBC before? Do they have a history of going after loan deficiency?

Any information would be greatly appreciated.

[ChipL]

Short sale financials are:
1) Hardship letter - Describe what happened that put you in the situation you're in now
2) Monthly income and expenses - all monthly outloays from your mortgage to your cell phone bill, incl. groceries, entertainment, etc
3) Proof of income - at least 30 days worth of bank statements or 2 month bank statements or last years taxes. They may even want past two years of taxes. You'll need to ask them.

As to the loan deficiency, make that part of your negotiations. The good news, if any, is that you can no longer be 1099'ed on the deficiency, so you won't owe taxes on that amount.

[mdstlrfan]

Thanks Chip, I have everything they are looking for pretty much ready. Just working the hardship letter and expense to income sheet. My question was more along the lines of any tips when filling out the expense to income sheet. Such as be as accurate as possible becuase they double check every little thing, run credit reports, etc... or be sure to show as much out going monies as possible to show there is no way you can afford the house.

I am not sure exactly what they are looking for. If they see that you still have disposable income at the end of the month does that change the way they look at accepting a possible short sell?

Thanks

[ChipL]

It may....you need to make a compelling case as to why you can no longer afford to make the payments. Showing negative cash flow is obviously the best way to do that.

I don't believe they can check all your numbers. Pulling credit would require your permission, as would checking with your employer for your income numbers. That's not to say that if you're claiming to have lost a job, they can't call your ex-employer to see if you're still working there. And if they find that's a lie, forget about your short sale.

Be honest and sincere with the lender explaining your hardship, but also be persistent in following up them once the short sale package is in their hands.

[westchester]

Always Put Everything Down The More You Show You Pay Out The Better....and Yes If They See Some Kind Of Extra Asset They Will Probably Try And Get That .................

[mdstlrfan]

Thank you both for the information. I have one last question. When or where do I get them to put in writing that they are accepting the amount of the short sell as payment in full. I saw the story of the person who found she had a lien on her house 4 years after a foreclosure and I have heard other horror stories as well. I have been told by realtors as well as short sell specialists that large banks do not generally come after you for any deficiency. They figure there is nothing to get. Reading the forum I suspect that is not exactly true. They also said that if any short sell package is rejected and you foreclose that they usually will not come after you becuase they rejected money and would have a hard time in court collecting any deficiency since they basically rejected monies by not accepting a reasonable short sell offer. I don't know if I am buying that.

I know I need to get everything in writing. I talked to one short sell specialist and she said that when the title company goes to close the loan they require a statement from the bank that they are accepting the short sell amount as payment in full and release the title to the house for the buyers. I get copies as well. She felt this is all that is needed to ensure they do not come after me for any deficiency? Any thoughts on this?

On a good note we had an offer come across today. It looks good. Once I complete the income \ debt worksheet and hardship letter I will be sending it all in. Hoping HSBC is willing to work it through.

Thanks again for all the information.

[westchester]

you would have to get it before the closing.....you want to know that as soon as they agree to the ss amount that is when you should probably look for the letter.....and remember if their are 2 banks involved make sure you get it from both........p.s. i am doing a short sale right now and it is in it's 3rd month with no light at the end of the tunnel....so be patient