Fraudulent Short Sales and Passing the Hardship Test
Important Tip: Ensure you have not made any misrepresentations on your mortgage application for your original note, home equity line or second notes. If your income is misrepresented in any way, it may be considered a mortgage fraud. If your hardship letter is not legitimate, please seek counsel from an attorney.
Agents should not list fraudulent short sales as it will put them and their seller at risk. Lenders will eventually require homeowners to submit proof of financial insufficiency, tax returns and wage information.
Fraudulent short sales are rare, but should you be involved unknowingly, make sure to execute a hold harmless agreement. Obtain a draft agreement from your attorney and have the homeowner sign.
Passing the hardship test is the very first part of the qualification process. Evaluate the seller over the phone to determine if the short sale will be viable. Should the homeowner fail the hardship test, the homeowner should agree to take a part of the deficiency or sign a promissory note. But this now depends on the lender.
The Gainesville short sale agents has had strategic short sales approved where cash contributions was not required. But you will not know that first hand, so the seller should agree to help right from the beginning. It’s great if they don’t have to contribute, but what happens when you find out at the end that they are not willing to apportion? It will be a great trouble then.
If unfortunately they don’t qualify and have to leave their home, then there will only be three options available to them: a deed in lieu, foreclosure or a bankruptcy. Ascertain that the seller is not in the middle of a loan modification process while filing a short sale this is because most lenders will not allow these two to be processed at the same time. If the seller’s loan modification has been denied, then you can use some of that document to process for the short sale.
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Call Stephanie Anson today at 352-535-0620 for a confidential phone interview regarding your options.
Please seek legal advice. This information is for informational purposes only.