The process for short sales in Wisconsin may not always be pleasant, but neither is giving up your home in foreclosure. The truth is, it is better to deal with short sale Wisconsin when you think you cannot pay your mortgage rather than allow the bank to foreclose your home.
When your lender approves the short sale Wisconsin, it means that they agree to take the sale as full amount of your mortgage even though the sale is less than the total amount due. For the seller, it is a discounted payoff on defaulted mortgages. For the buyer, it is a bargain. And for the lender, it is a way to mitigate loss from a delinquent mortgagee.
Although it seems that a short sale is beneficial to everyone, not all lenders approve of it especially if foreclosure seems to be more financially beneficial for them. Moreover, not all sellers, properties and buyers are qualified for the sale. It is important that before a seller goes through a short sale, they must have the knowledge and understanding about the requirements.
Although each bank has different demands and requirements before they approve the short sale Wisconsin, there are some common things that they need in order to examine the proposed sale. Below are the basic requirements needed for the short sale.
- Hardship Letter. The more difficult your financial situation, the more the bank considers the short sale. Your letter serves as your plea of why the bank should accept an amount that is lower than the actual amount due. Common situations for default are loss of job, death of family members, severe illness and divorce. These things are commonly acceptable to the lender.
- Financial Records. Lenders want to check if you are truly incapable of paying your debt so you need to provide records of your assets and possible income. You need to present your saving accounts, negotiable instruments, stocks and list of properties before they decide to “forgive” your delinquency. You would even need to explain any unaccountable deposits reflected in you bank statement so they can determine if there is still possibility of further deposits. In addition, you will need to provide them your medical bills, unpaid utility bills, termination letter, divorce papers and other relevant documents to support your financial difficulty.
- Authorization Letter for disclosure of information. You need to have an expert WI short sale agent who will deal directly with your lender. The agent knows the process and can do the hard work for you. But before the agent can help you, he should know the details of your nearly-foreclosed property in which case, you must prepare an authorization letter to allow the bank to disclose the details to the agent.
- Purchase and Listing Agreement. Banks require a copy of the purchase and listing agreement for the short sale. They may or may not approve what is in the agreement. For instance, they may not agree to pay for the termite inspections, home protection plan or certain commissions written on the agreement. In which case, a renegotiation may take place.
- Comparative Market Analysis. This shows the prices of homes that are similar to the subject property and active on the market, have pending sales or sold within the past 6 months. The agent needs to prepare this document for the negotiation of the short sale. This will serve as support as to why lenders should accept the price offer of the sale.
- Estimate of Closing Costs. This presents the sale price and the costs related to the property such as the unpaid loan, outstanding payments and late charges. Your short sale agent would need to work on this. If, at the end, the computation shows that you will receive cash, it is likely that you will not need to sell the property.
With these documents on hand, your lender may or may not approve your proposed short sale Wisconsin. The process requires several negotiations and significant waiting time.
