The first step is to understand your current financial situation and act. If you avoid action, you could be creating an even more difficult challenge for your financial and mental well-being.

Action plan-

Gather your tax returns, your mortgage statements, your personal bank statements, your income documentation, and a record of your monthly expenses. After you have a clear picture – or even a good understanding – of your finances it is time to find someone to guide you through the process.

Basically what you are doing in a short sale situation is you are applying to the mortgage company (whom hold your mortgage notes) for a short sale and you do so in the following steps:

1) Your property must be listed by a licensed real estate agent.

2) You have to provide the following documents:

• Hardship letter ? include why you are in foreclosure/short sale position and state that you want to avoid bankruptcy
• Supporting documentation in reference to hardship letter (if available), divorce, medical, bills, etc.
• Completed financial statement- what does your monthly budget look like? How much coming in vs. how much going out.
• Last two months pay stubs
• Last two years income tax returns
• Last two months bank statements
• Notarized financial statement if you don´t have pay stubs, tax returns, or bank statements
• Copies of current mortgage statement(s)
• Any correspondence from attorney regarding foreclosure

Once the short sale package is submitted to it is set for review by mortgage/lien holders in their loss mitigation department. They hire a 3rd party BPO (broker price opinion) specialist to determine the actual value of the subject property. Then the first mortgage holder determines what they will allow the second (third lein, etc) mortgage to have. In some cases the first will only allow $1000-$5000 to the second mortgage holder. The file then goes to review and the approval is issued. Once the short sale is approved, we will have a closing/moving date in mind. Our timing gets better every year. We have some that sell in as little as 45 days and some that take 3-4 months. This depends on the bank’s short sale process and the marketplace and foreclosure rates in the given area.