Short Sales & Foreclosures

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.