
Short Sales & Foreclosures
A short sale transaction occurs when mortgage lenders allow the borrower to sell the house for less than the amount owed on the mortgage. The foreclosure process occurs when lenders/banks repossess the house, often against an owner's will. A Foreclosure will stay on your credit report for seven years.
The short sale process from the bank's end of things, once they receive the seller's package.
They acknowledge receipt of the file. This can take longer than 10 days; sometimes, it is a month or more.
A negotiator is assigned, which might take up to 30 days.
A broker price option (BPO) is ordered, where a broker generates an educated opinion on the value of the home.
Banks generally will refuse to share the results of the BPO.
A second negotiator might be assigned, taking an additional 30 days.
The file is sent for review based on the pooling and services agreement. This can also take up to 30 days.
The bank might then request that all parties sign an "arm's-length" affidavit, which is a document signed by the buyer and seller stating that neither party knows the other, nor is there any type of pre-existing relationship between the two.
The bank will then issue a short sale approval letter if the sale is approved.
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