Preventing Foreclosures With An Arizona Short Sale

You may have heard about Arizona short sales as a way to prevent foreclosure. You think it might work for you, but how do you start? The first thing you need to do is get your short sale request together for your lender. Your short sale request convinces your lender to accept your deal and possibly avoid foreclosure.

Steps to get started with an Arizona short sale

  • Call your mortgage lender’s loan workout department or loss mitigation department. Know that a customer service representative does not have the authority to accept your short sale request, so don’t waste your time talking to them. They can, however, direct you to the right department.
  • Once you are connected to the right department, ask for their short sale packet. It also doesn’t hurt to ask them if they can give you an idea of what mortgage balance they might settle for if your packet gets approved. Sometimes they will give you a general figure that they will work with. It is useful to get this number because that is the sales price for which you are going to try to sell your house.
  • Next you want to put together your short sale hardship letter, or letter of explanation. This letter is similar to a proposal, but there are some differences. It needs to include reasons you are behind on your payments and an explanation of why things are not going to get better soon. The letter should cover what happened without going into a lot of extra detail. Whatever your story, whether you were laid off, had a serious illness, or have an ARM that you didn’t understand, you should state it clearly and simply. Be honest and don’t blame the mortgage company, even if you feel they were at fault.
  • Another tactic to use in the hardship letter is mentioning that you are considering bankruptcy. The lender does not want you to file bankruptcy because if stops foreclosure proceedings for a while. If your mortgage company thinks you might go bankrupt, they might be more open to accepting a short sale. Just remember not to use bankruptcy as a threat. You want them to work you with on good terms, and they will not want to work with you if they feel threatened.
  • You also want to authorize your real estate agent to work on your behalf with the mortgage company. Your agent can do a lot of the negotiating for you. They know what needs to be done and are a unemotional third party. Get any agreement with your agent in writing and keep up with the conversations they have with your lender.
  • The next step is gathering all of your financial documents related to your income, bills and assets. Your lender will want your last two months pay stubs and bank statements. They will also want to look at your last several years of tax returns. Make sure you send in a summary sheet that explains everything. Make it as easy as possible for them to get a clear picture of your financial status.
  • You also need to supply your lender with the sales contract for your house. Make sure it clearly states any closing cost assistance or other concessions that you might give the buyer. Include qualification information about the buyer such as a pre-approval letter and information about the type of loan, the amount of down payment, etc. Give the lender an assurance that you are actually going to be able to sell your home.
  • Once you have all this together you will want to send in your short sale request, including specific information your lender has asked for. Then give it some time. There are a lot of short sales in the system now, so don’t accept a purchase settlement date of 30 days or less. This won’t give the mortgage company enough time to process your information. 60 to 90 days is a more realistic time frame.
  • Finally, while you are working on your short sale package try to think about it from the lender’s perspective. Make your offer attractive to them and you will be more likely to reach your goal – staying out of foreclosure.