Seller and Borrower Short Sale and Loss Mitigation Documents and Instructions

Seller and Borrower Short Sale and Loss Mitigation Documents and Instructions

General Short Sale Documents
Download each of the documents below and fill out as instructed.

• Short Sale Borrower Income, Expenses and Financial Information Form (in PDF format for you to fill out, sign and date).
• Sample Borrower Short Sale Hardship Letter (in MS Word format so you can write your own Hardship Letter) – This is a sample for you to see how the Borrower hardship Letter looks.  Please do not fill it out.  Instead, please just email a brief explanation of your hardship information to us so we can edit it and insert it into this Hardship Letter template for you.
• Short Sale Third Party Authorization Form (in PDF format for you to fill out, sign and date).
• Short Sale Welcome Packet – This document would have been customized for you and and emailed to you as an attachment.

Lender Specific Short Sale and Loss Mitigation Documents and Links
Download the applicable document(s) (or click the applicable link) based on the mortgage company or companies that you pay your mortgage payment to each month (i.e. the mortgage servicer) and fill out/complete as instructed.

• Bank of America Short Sale Third-Party Authorization Form (required for all loans serviced by Bank of America including FHA, VA, Fannie Mae, Freddie Mac, HAFA and Cooperative short sales) – If Bank of America services your mortgage loan(s), you will need to download the Bank of America Third-Party Authorization Form and do the following: (1) Page 1 – Fill in the Loan Number(s), Borrower Name(s) and Property Address at the top of page 1 and then sign and date on the lines located near the bottom of page 1.  (2) Page 2 – Print the Property Address on the lines provided on page 2.  When finished, please return both pages to me.
• Bank of America Borrower Election Form to Opt Out of Loan Modification – If you do not want to move forward with a short sale and skip the loan modification (home retention options) review process please complete and sign this form and send to BAC.
• Bank of America FHA Short Sale Packet (only for FHA insured loans which are serviced by Bank of America).
• Bank of America FHA HUD PFS Short Sale Initiated Before an Offer 9-2012.
• Chase Home Finance LLP/JPMorgan Chase Bank, N.A Short Sale Packet with Request for Mortgage Assistance Form (RMA) – This form requires your loan information, hardship, financial information, etc. and needs to be ink signed.
• Chase IRS Form 4506T-EZ – This form allows Chase to request a summary of your most recent Internal Revenue Service tax filings to confirm your income information. This form will also need to be ink signed.
• Chase Authorization to Provide and Release Information to a Third Party – This form authorizes Chase to speak to a third party (such as a real estate agent) about a customer’s account. This form is mainly used internally to work with third parties on the terms of the sale or release of the property. This form will also need to be ink signed.
• Chase Bankruptcy Attorney and Borrower Authorization Form – This form is used to allow Chase to work directly with the customer (not their attorney) when determining assistance eligibility when the borrower is in an active bankruptcy. This form will also need to be ink signed.
• CitiMortgage Customer Hardship Assistance Package (Fill Out and Print Out) – After you click this link, fill in all the fields, print, sign and date. After you are finished please email to shortsales@endingforeclosures.com so we can proceed with your short sale application.
• CitiMortgage Customer Hardship Assistance Package (Short Sale Request Link – DO NOT USE THIS LINK UNLESS SPECIFICALLY INSTRUCTED) – After you click this link, fill in all the fields and submit. Please be sure to forward the confirmation email you receive from CitiMortgage to shortsales@endingforeclosures.com so we can proceed with your short sale application.
• EverHome Mortgage Company Financial Package.
• Fifth Third (5/3) Bank Hardship and Short Sale Options.
• Fannie Mae Homeowner Authorization Form – If your mortgage loan is owned by Fannie Mae, this form will allow your short sale agent or processor to communicate directly with Fannie Mae. Please download, fill out, sign and date.
• Fannie Mae and Freddie Mac Uniform Borrower Assistance Form 710.
• Fannie Mae HomePath for Short Sales – If your mortgage loan is owned by Fannie Mae, you or your short sale agent or processor can now initiate your short sale directly with Fannie Mae instead of with your loan servicer. This is good news because it can help you avoid some of the unpleasant delay tactic games that some mortgage loan servicers play.
• Fannie Mae HomePath for Short Sales List Price Guidance – If your mortgage loan is owned by Fannie Mae, you or your short sale agent or processor can now request List Price guidance before listing your house for sale. In other words, Fannie Mae will order valuations of your house. In order for Fannie Mae to approve a short sale the sale contract must net Fannie Mae a relatively high percent of their valuation. Generally this means at least 80%.
• Fannie Mae HomePath for Short Sales Contract Submission – If your mortgage loan is owned by Fannie Mae, you or your short sale agent or processor can now submit your short sale contract directly to Fannie Mae (depends on your mortgage loan servicer).
• IndyMac Mortgage Services (A Division of OneWest Bank) Short Sale or Pre-Foreclosure Sale Application.
• Ocwen Short Sale Request Package – REQUEST FOR MORTGAGE ASSISTANCE (RMA) / HARDSHIP AFFIDAVIT – Please click this link then go to the “Customer Service” link/drop down menu near the top right of the web page and scroll down to “Short Sale Package” and click that link to download the Ocwen Short Sale Request Package – REQUEST FOR MORTGAGE ASSISTANCE (RMA) / HARDSHIP AFFIDAVIT.
• Ocwen Financial Analysis and Short Sale Request Package – The Ocwen Short Sale Package you will need to fill out depends on your particular loan so we will need to contact Ocwen to find out.
• Regions Bank and Regions Mortgage Short Sale Packet.
• SunTrust Mortgage Short Sale Guide.
• SunTrust Home Retention Request Form (including Short Sales).
• Wells Fargo Short Sale Information Website for Agents / Wells Fargo Short Sale Request Website for Borrowers.
• Wells Fargo Home Affordable Foreclosure Alternatives (HAFA) Matrix – This documents shows the basic requirements for a Wells Fargo HAFA application.

Please be sure to fill in my information as your Authorized Third Party and/or Real Estate Agent/REALTOR. Please use the information below:

Company Name: Edge Advantage Realty, LLC
Company Address: 2615 Medical Center Pkwy, Suite 1560, Murfreesboro, TN 37129
Company Phone: 615-784-3343
Company RE License #: 263576

Broker/Agent: James W. McCormack
Broker/Agent Phone: 615-796-6898
Broker/Agent Fax: 888-681-8253
Broker/Agent Email: jim@jimtherealestateexpert.com

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Federal Housing Finance Agency (FHFA) — the regulator and conservator of Fannie Mae and Freddie Mac and the regulator of the 12 Federal Home Loan Banks

The FHFA oversees Fannie Mae and Freddie Mac as well as the 12 Federal Home Loan Banks (think Bank of America, Wells Fargo, Chase (JPMorgan Chase), CitiMortgage (Citi Financial), etc.). The FHFA website offers mortgage and bank foreclosure prevention help and options. This includes the Home Affordable Refinance Program (HARP) that was expanded in October 2011 (see below).

Home Affordable Refinance Program (HARP)

According to the FHFA website, “For a mortgage to be considered for a HARP refinance, it must be owned or guaranteed by Fannie Mae or Freddie Mac. To determine if your loan is owned or guaranteed by Fannie Mae or Freddie Mac, you should contact your mortgage servicer who should verify that information for you.” You mortgage loan servicer is the bank or mortgage company that you pay your monthly mortgage payment to. You can also verify the ownership of your mortgage loan via the following resources:

• Who Owns My Mortgage Loan?.
• Making Home Affordable (MHA) Mortgage Loan Lookup.

After you verify the owner (called the “loan investor” in the mortgage business) of your mortgage loan and you find that your mortgage loan is owned by Fannie Mae or Freddie Mac, then you should use the following resources to obtain assistance to help stop the mortgage foreclosure affecting your home or property:

• Fannie Mae (FNMA) Mortgage Loan Foreclosure Help.
• Freddie Mac (FHLMC) Mortgage Loan Foreclosure Help.

According to the FHFA website, “If your loan is not a Fannie Mae or a Freddie Mac loan, your loan is not covered by the HARP refinance program. You may want to contact your servicer or other lenders to discuss
refinance programs you may be eligible for.” You can obtain more information about the HARP mortgage loan refinance program here: HARP mortgage loan refinance program.

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Fannie Mae (FNMA) and Freddie Mac (FHLMC) Home Retention (Forbearance and Modification) and Short Sale Information – Home Affordable Modification Program (HAMP), HAFA (Home Affordable Foreclosure Alternatives) and HAFA II are under the Making Home Affordable (MHA) Program
The old HAFA Short Sale Program ended on 12/31/2012 and is being phased out. It will no longer be available after 12/31/2013. The new HAFA II Short Sale Program has replaced the old HAFA Short Sale Program. The new HAFA II Short Sale Program is only for loans owned (i.e. they are the loan investor) by Fannie Mae (FNMA) and Freddie Mac (FHLMC). See the HAFA and HAFA II information below.

HAFA Short Sale Program and Fannie Mae (FNMA) and Freddie Mac (FHLMC) Short Sale Information

• Fannie Mae Servicing Guide Announcement for Delinquent Loans SVC-2013-23 – This Fannie Mae publication on 11/25/2013 instructs mortgage loan servicers how to service your delinquent mortgage loan and how to handle short sale requests.
• Freddie Mac Servicer Guide Bulletin for Short Sales 2013-24 – This Freddie Mac publication on 11/25/2013 instructs mortgage loan servicers how to service your delinquent mortgage loan and how to handle short sale requests.
• Fannie Mae and Freddie Mac Standard Short Sale and HAFA II Short Sale Policy Highlights May 2013 – This document provides the highlights of the new HAFA II short sale program. If you have a non-Fannie Mae 2nd mortgage or other junior liens, Fannie Mae says “Up to $6,000 is available from closing proceeds to obtain the release of subordinate liens. Servicers should facilitate such releases, which are required for closing the short sale.” Therefore, if your 2nd mortgage company or other junior lienholders will accept a total of $6,000.00 or less you should be in good shape to complete a short sale.
• Fannie Mae Loan Workout Hierarchy for Conventional Loans May 2013 – This document provides the highlights of the loan workout options (i.e. forbearance, repayment plan, modification, HAMP, short sale (HAFA II) and deed-in-lieu of foreclosure), that are available if your loan is owned by Fannie Mae and the order in which Fannie Mae will consider those workout options.
• Fannie Mae Short Sale Servicing Guide Announcement SVC-2012-19. Standard Short Sale/HAFA II and Deed-in-Lieu of Foreclosure Requirements. – This document provides Fannie Mae’s mortgage loan servicing guidelines when it comes to short sale, deed-in-lieu and foreclosure. If your mortgage loan is owned by Fannie Mae, You can read this to make sure that your loan servicer is following Fannie Mae’s policies.
• Fannie Mae Short Sales Help and Assistance Website – If Fannie Mae owns your mortgage loan you can use the Fannie Mae HomePath website to submit a short sale support request to Fannie Mae directly.  This can be a great way to get help with your Fannie Mae short sale if it is being delayed or otherwise mishandled by your bank or mortgage servicer.

HAFA Short Sale Program Information

• Making Home Affordable (MHA) Handbook including information about the HAFA Short Sale Program (Revised 5-2013) – This guide explains the various workout options (i.e. loan modification, forbearance and short sale) for loans that are eligible under the MHA program. This includes the government HAFA short sale program.
• HAFA Short Sale Program Overview from the Making Home Affordable and Home Affordable Modification Program Website – This website shows the current HAFA short sale program eligibility guidelines.
• National Association of REALTORS (NAR) Guide to Understanding the HAFA Short Sale Program – There are substantial benefits for financially distressed homeowners and borrowers to participate in the HAFA Short Sale Program.
• Search the List of Mortgage Loan Servicers participating in the HAFA Short Sale Program – Your mortgage loan servicer may participate in the HAFA Program.  You find out if your mortgage loan servicer participates in the HAFA Program.
• Making Home Affordable (MHA) Frequently Asked Questions (including information about the HAFA Short Sale Program).
• Sample HAFA Short Sale Program Agreement – This document gives you an idea of what to expect if you are offered acceptance into the HAFA Short Sale Program.
• HAFA Escalation Process Courtesy of the National Association of REALTORS (NAR) – This document provides information on how to escalate your HAFA application if it is not moving forward.

HAFA Short Sale Program Documents – The HAFA Short Sale Program is under the MHA Program (and formerly under HAMP) so you will to use the MHA forms (do not download the forms from the government’s MHA website as they usually outdated – please use only the forms listed below) to apply for a HAFA short sale, but be sure to clearly indicate that you are requesting a short sale, not a loan modification.  For the documents that need to be filled out (borrower(s) only – i.e. if the property is owned jointly by a husband and wife, but the husband is the only borrower on the loan you only need to submit the following documents for the husband), please be sure to read and follow all the instructions exactly as written.  Generally, the documents require to apply for the HAFA Short Sale Program are as follows (use document links below):

• Making Home Affordable Program Request For Mortgage Assistance (RMA) for HAFA Short Sale Program and Dodd-Frank Certification – This document is required to apply for the HAFA Short Sale Program and is sometimes necessary for any short sale.  Please follow the instructions carefully and fill out completely.  Please do not check any boxes or fill in any agent information in the “Is the property listed for sale?” box/section.
• IRS Tax Form 4506-T – Blocks 1-4 – Fill out completely. Block 5 – Insert your bank’s address (not the local branch – for example if your lender is Bank of America enter Bank Of America Home Retention Services, 9700 Bissonnet Street, Suite 1500, Houston, TX 77036). Block 6 – Enter the type of tax return that is applicable to you (i.e. probably 1040). Also, check boxes 6a, 6b and 6c. Block 9 – Enter the ending date of the years for which the documents are requested (i.e. 12/31/2009, 12/31/2010, 12/31/2011 – only one in each block/box). Signature Box Area – Enter your Phone Number. Signature Box Area (Signature of taxpayer(s)) – Please sign and date on the lines provided (spouse will also need to do this if the tax returns are filed jointly).
• Verification of Income (Proof of Income Checklist) – As the list found on this linked page shows, generally this consists of your most recent 2 paystubs, which must at least cover the last 30 days (i.e. if you get paid 1x per week then you will need 4 paystubs, if you get paid every 2 weeks or 2x per month then you will need 2 paystubs, but if you get paid 1x per month then you will need 2 paystubs).  However, the proof of income could also be Pension Income, Social Security Income, Disability Income, Alimony, business income, and any other source of income.  You will need to provide proof of income that applies in your case.  For example, if you are self employed, or own a business, you will need to provide a Year to Date (YTD) Profit & Loss Statement for the business.  If you are unemployed, but not receiving unemployment benefits, you will need to explain this prominently in your Borrower Short Sale Hardship Letter (see below) and may even need a Borrower Lack of Paystubs Letter (I will prepare this for you if necessary).
• Bank Statements (most recent 2 months) – You will need to provide the full bank statements for all the bank accounts that the borrower(s) on the loan own. Online printouts of account activity are not acceptable. Most banks make full statements available for download via their online banking systems.
• Tax Return (most recent 2 years).
• W-2 (most recent 2 years).
• Borrower Short Sale Hardship Letter (see list above under General Short Sale Documents) – You need to explain what happened and what caused you to not be able to pay your mortgage loan.
• Borrower Income, Expenses & Financial Information (see list above under General Short Sale Documents).
• Third Party Authorization (signed) – I will provide this document to you.
• Listing Agreement (signed) – I will provide this document to you.
• Utility Bill (copy of most recent one) – Your lender wants a copy of your most recent electricity, gas, water, phone, cable, etc. bill (just one bill, not a copy of each bill) to verify that the utilities are on and that you occupy the property. If you do not occupy the property then please let me know and I will send you a letter (after obtaining some information from you), which details the occupancy status and maintenance of the property.
• Divorce Decree (if applicable) – The party that is granted sole ownership of the Property being sold must obtain a signed and notarized Quit Claim Deed from the party relinquishing ownership interest in the Property.  If you are legally separated, but not divorced the court issued separation agreement will probably suffice.
• Military Service Orders/Letter (if applicable) – If you are currently Active Duty in the US military then you will need to provide a copy of your orders, or at least the detailed information about your current station.

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HUD/FHA Insured Mortgage Short Sale Program – HUD Preforeclosure Sales Program

HUD Pre-foreclosure Sale Program (HUD PFS Program) – If your mortgage loan is FHA insured then you will absolutely want and need to participate in this short sale program. Below are documents that pertain to the HUD Preforeclosure Sale Program (HUD PFS) and FHA Short Sales:

• HUD Mortgagee Letter 2014-15 – Updated Requirements for Pre-Foreclosure Sales (PFS) and Deeds in Lieu (DIL) of Foreclosure (the new guidelines of the HUD PFS Program effective no later than 10/1/2014) – This document covers the new guidelines of the HUD PFS Program (FHA short Sale Program).
• HUD Mortgagee Letter 2013-32 – Update to FHA’s Loss Mitigation Home Retention Options – Effective no later than 12/1/2013, the FHA is requiring mortgage lenders servicing FHA insured mortgage loans to loosen their home retention requirements. This means that more FHA borrowers will be able to save their homes from foreclosure. This is great if those homeowners wanted to keep their homes, but bad if they wanted to short sell their homes because these new rules will force other homeowners to retain their homes even if they would rather sell via a short sale. Like most things, though, there are ways to get past this issue and move forward with a short sale. Please contact us for more information.
• HUD Pre-foreclosure Sale Program Procedure.
• HUD Preforeclosure Sales (HUD PFS) Program Facts Sheet (Revised 11-29-2013).
• HUD PFS Allowable and Disallowable Fees Paid From Seller’s Funds at Closing (Revised 9-25-2014).
• HUD Mortgagee Letter 2013-23 – Updated HUD Pre-Foreclosure Sale (PFS) and Deed in Lieu (DIL) of Foreclosure Requirements (the new guidelines of the HUD PFS Program effective 7/9/2013) – This document covers the new guidelines of the HUD PFS Program (FHA short Sale Program).
• HUD Pre-Foreclosure Sales Program Mortgagee Letter 2008-43 (previous guidelines of the HUD PFS Program effective 12/24/2008 – any guidelines not changed in newer Mortgage Letters remain in force) – This document contains the previous guidelines of the HUD PFS Program (FHA short Sale Program).
• HUD Mortgagee Letter 2002-13 – Deed-In-Lieu of Foreclosure Cash For Keys (effective 6/7/2002 – any guidelines not changed in newer Mortgage Letters remain in force) – This document contains HUD and FHA policies on giving borrowers cash for keys to move out of the property prior to foreclosure or after the foreclosure sale.
• HUD Mortgagee Letter 2000-5 – HUD Loss Mitigation Program Changes (previous guidelines of pertaining to HUD’s Loss Mitigation efforts effective 1/19/2000 – any guidelines not changed in newer Mortgage Letters remain in force) – This document contains the HUD and FHA Short Sale Guidelines (i.e. Loss Mitigation) before the HUD PFS Program was created.
• HUD PFS & FHA Waterfall Worksheet by MFY Legal Services 3-19-2014 – This document explains the FHA Insured Mortgage Loan Waterfall Process, which is HUD’s name for their loss mitigation procedures.
• FHA Preforeclosure Sale Program (aka FHA Short Sale) Presentation from January 2014 – This Presentation is based on HUD Mortgagee Letters 2013-23, 2008-43 and 2010-08 and provides a fairly easy to follow breakdown of the HUD Preforeclosure Sale Program / FHA Short Sale Program.

If you are accepted into the HUD Preforeclosure Sale Program, you will receive a HUD Preforeclosure Sale Program Approval to Participate (this is a sample), which is filled out by the bank or mortgage lender and states the terms of the short sale that will be acceptable to your bank or mortgage lender and HUD. To start your application to this short sale program please fill out the documents indicated below, but be sure to clearly indicate that you are requesting a short sale, not a loan modification. For the documents that need to be filled out (borrower(s) only – i.e. if the property is owned jointly by a husband and wife, but the husband is the only borrower on the loan you only need to submit the following documents for the husband), please be sure to read and follow all the instructions exactly as written. Generally, the documents require to apply for the HUD Short Sale Program are as follows:

• IRS Tax Form 4506-T – Blocks 1-4 – Fill out completely. Block 5 – Insert your bank’s address (not the local branch – for example if your lender is Bank of America enter Bank Of America Home Retention Services, 9700 Bissonnet Street, Suite 1500, Houston, TX 77036). Block 6 – Enter the type of tax return that is applicable to you (i.e. probably 1040). Also, check boxes 6a, 6b and 6c. Block 9 – Enter the ending date of the years for which the documents are requested (i.e. 12/31/2009, 12/31/2010, 12/31/2011 – only one in each block/box). Signature Box Area – Enter your Phone Number. Signature Box Area (Signature of taxpayer(s)) – Please sign and date on the lines provided (spouse will also need to do this if the tax returns are filed jointly).
• Verification of Income (Proof of Income Checklist) – As the list found on this linked page shows, generally this consists of your most recent 2 paystubs, which must at least cover the last 30 days (i.e. if you get paid 1x per week then you will need 4 paystubs, if you get paid every 2 weeks or 2x per month then you will need 2 paystubs, but if you get paid 1x per month then you will need 2 paystubs). However, the proof of income could also be Pension Income, Social Security Income, Disability Income, Alimony, business income, and any other source of income. You will need to provide proof of income that applies in your case. For example, if you are self employed, or own a business, you will need to provide a Year to Date (YTD) Profit & Loss Statement for the business. If you are unemployed, but not receiving unemployment benefits, you will need to explain this prominently in your Borrower Short Sale Hardship Letter (see below) and may even need a Borrower Lack of Paystubs Letter (I will prepare this for you if necessary).
• Bank Statements (most recent 2 months) – You will need to provide the full bank statements for all the bank accounts that the borrower(s) on the loan own. Online printouts of account activity are not acceptable. Most banks make full statements available for download via their online banking systems.
• Tax Return (most recent 2 years).
• W-2 (most recent 2 years).
• Borrower Short Sale Hardship Letter (see list above under General Short Sale Documents) – You need to explain what happened and what caused you to not be able to pay your mortgage loan.
• Borrower Income, Expenses & Financial Information (see list above under General Short Sale Documents).
• Third Party Authorization (signed) – I will provide this document to you.
• Listing Agreement (signed) – I will provide this document to you.
• Utility Bill (copy of most recent one) – Your lender wants a copy of your most recent electricity, gas, water, phone, cable, etc. bill (just one bill, not a copy of each bill) to verify that the utilities are on and that you occupy the property. If you do not occupy the property then please let me know and I will send you a letter (after obtaining some information from you), which details the occupancy status and maintenance of the property.
• Divorce Decree (if applicable) – The party that is granted sole ownership of the Property being sold must obtain a signed and notarized Quit Claim Deed from the party relinquishing ownership interest in the Property. If you are legally separated, but not divorced the court issued separation agreement will probably suffice.
• Military Service Orders/Letter (if applicable) – If you are currently Active Duty in the US military then you will need to provide a copy of your orders, or at least the detailed information about your current station.

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United States Veteran Administration (VA) Compromise Sale (Short Sale) Program (Owner Occupants Only)

United States Department Of Veterans Affairs Compromise Sale Program – If your mortgage loan is VA Guaranteed the following documents will be used for a VA Compromise Sale (the official name for a VA Short Sale):

• Department Of Veterans Affairs Compromise Sale Program Information – This document explains the VA Compromise (VA Short Sale) process and covers the main points of how your short sale will be handled by your bank or mortgage company.
• VA Compromise Sale Program Financial Status Report – This document is the financial form that you will need to fill out and give to your bank or mortgage company in order for them to review your financial situation for a VA Compromise Sale.
• New VA Short Sale Net Sale Proceeds Percentage of Appraised Value as of 9-3-2013 – This document explains the new (as of 9/3/2013) Net Proceeds Requirement (how much a proposed short sale must net) of VA Compromise Sale as a percentage of the Appraised Value (as determined by the VA).