Why Short Sale Lenders Want Promissory Notes

Why would a short sale lender ask for a promissory note or cash contribution from the seller? The emails below, from Bank of America negotiators, will show you exactly why:

EXAMPLE 1: Santa Rosa Beach Florida Short Sale
"Please be advised, that before we discuss the closing costs you have to talk to the sellers regarding contribution to mitigate the loss.
The reasons:
* FICO in the high 700, never late on any account, continue to make payments on all credit cards
* good deposits
* good income on tax returns
Requested contribution: Promissory note of 12,000, payable in 8 years, 125 per month, 0 interest."

EXAMPLE 2: Destin Florida Short Sale
"Seller is currently paying off a car at 453.00 per month and several credit cards paid on time, Seller is getting deposits of 3000 and 2500 every other weeks on her bank accounts. I'm sure she can afford 333.33 per month.
The note is 0% interest for 5 years at 333.33 per month. There is no way we are releasing the liens debts over 684K without the seller contribution."

Both of these examples show how financial information is scrutinized by the short sale lender. Apparently, good credit, few delinquencies and regular income make the seller a candidate for contributing to the shortfall. In other cases, the lender, servicer, or mortgage insurance company may request a contribution due to its loss amount or policy. It is best to prepare your seller in advance.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Search Destin Real Estate
Destin Short Sales & Pre Foreclosure Help.
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Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com
Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo or on the Emerald Coast of Florida: Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field

Short Sale Seller Does the "Right" Thing

Today I got a call from a short sale seller. He already listed his house with another Realtor, but had read my blog and wanted to tell me about his scenario. I think he wanted an "ear" to listen to his story, and give him some reassurances. I was happy to oblige. The gentleman had done a cash-out refinance on his house several months earlier- receiving about $15,000 back from the transaction. Since then, his fortunes had plummeted, his roommate had moved out, and he could no longer afford his mortgage payments. His mortgage was backed by FHA, and he told me his lender had given him an acceptable price at which the property could sell. He got lucky, and now has an offer. His short sale package is at the bank awaiting approval. His fears were that he had taken out the $15,000 cash from the refinance, and that based on that, his short sale would not be approved. He said his file was in line for review, and he wanted to "do the right" thing and write a letter stating that he would pay back the extra $15,000 in the form of a promissory note, as he has no savings. He asked me if I thought that would help his case. Sure, perhaps the lender would approve his short sale without a promissory note, or perhaps they would reject the offer, or maybe they would ask for a lump sum payment. But what he wanted to do, to make things right with his conscience and his personal code of conduct, was to pay back that money. And that's what he is doing.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Search Destin Florida real estate and vicinity.
Short Sale Pre Foreclosure Help.

Specializing in real estate sales, short sales and traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

email itswendy@itswendy.com

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Short Sale Seller Does the "Right" Thing* Contact Wendy Rulnick regarding Navarre Florida real estate and vicinity.

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