Who Actually Approves a Short Sale?
For many homeowners, the short sale process can be very confusing and frustrating. Oftentimes, it seems as though they are getting the run around and that their lender's goal is foreclosure. Horror stories abound about short sales that have not happened because the property was sold at foreclosure before the sale could be approved.
So, who actually approves a short sale and why does it take so long? The first step in the short sale process is submitting the short sale package to the lender/servicer. In addition to reviewing the short sale package, the lender/servicer will also order an appraisal or broker price opinion (BPO) to determine the fair market value of the property. Review by the servicer/lender can take 30 to 90 days or more.
At this point, the lender/servicer may do one of several things:
If the lender/servicer approves the short sale, the next step is to send the file for review by the Private Mortgage Insurance (PMI) carrier. In many cases, the review by PMI carrier can take 30 days or more. At the conclusion of its review, the PMI carrier may either:
It's important to remember that every short sale is different and time lines may vary depending on the homeowner's circumstances, how many lien holders must approve the sale, and who the lender/servicers, PMI carriers, and investors are. Moreover, every short sale is a negotiation and a homeowner is never obligated to accept the terms and conditions imposed by the lender/servicer, PMI carrier, or investor.
Note that the review process for FHA short sales and HAFA short sales usually does not take as long as the review process for traditional short sales.
For more information about short sales, visit http://GeorgiaShortSaleCentral.com.
So, who actually approves a short sale and why does it take so long? The first step in the short sale process is submitting the short sale package to the lender/servicer. In addition to reviewing the short sale package, the lender/servicer will also order an appraisal or broker price opinion (BPO) to determine the fair market value of the property. Review by the servicer/lender can take 30 to 90 days or more.
At this point, the lender/servicer may do one of several things:
- Approve the short sale;
- Accept the offer, but impose conditions on the seller, i.e. require a monetary contribution or execution of a promissory note;
- Make a counteroffer; or
- Deny the short sale.
If the lender/servicer approves the short sale, the next step is to send the file for review by the Private Mortgage Insurance (PMI) carrier. In many cases, the review by PMI carrier can take 30 days or more. At the conclusion of its review, the PMI carrier may either:
- Approve the short sale;
- Approve the short sale with conditions, i.e. require a monetary contribution from the seller or require him to sign a promissory note; or
- Deny the short sale.
- Approve the short sale;
- Approve the short sale with conditions, i.e. require a monetary contribution from the seller or require the execution of a promissory note by the seller; or
- Deny the short sale.
It's important to remember that every short sale is different and time lines may vary depending on the homeowner's circumstances, how many lien holders must approve the sale, and who the lender/servicers, PMI carriers, and investors are. Moreover, every short sale is a negotiation and a homeowner is never obligated to accept the terms and conditions imposed by the lender/servicer, PMI carrier, or investor.
Note that the review process for FHA short sales and HAFA short sales usually does not take as long as the review process for traditional short sales.
For more information about short sales, visit http://GeorgiaShortSaleCentral.com.
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