Short Sale Help-YIKES!

     Early last week, with the help of short sale expert Eme, I closed a deal that had been looming for 6 months. The sheriff sale was scheduled for last week too--now, that would be considered a "close call"!  Today's topic my seem a little dry, and a lot more boring than most.  I feel it necessary to write about short sales (Realtor cringe), because both homeowners and Realtors should be aware that a short sale, may be an alternative to a foreclosure. 

     I would normally tell you that it does not matter why or how a seller finds themselves owing more than the amount of all the liens filed against the property.  In this instance, the home had been almost paid off at one time.  Then the predators hit promising the 80+ year old man, the moon, plus a million dollars if he would just send money!  Sad but true, banks loaned him waaaaay more than the house was worth! Unfortuantely, those loan proceeds are now in some foreign country in the hands of a crook.    Yes, he had caring family but the damage was done by the time they realized what had happened.  Well, that is long story short, but what to do now, is even more important.
     First and foremost, an over-mortgaged homeowner should:  Contact a Realtor knowledgeable in the short sale process.  Without the "know how", time can pass and the sheriff sale can be here before you have the house sold.  Homeowners, ask your Realtor if the know how to do a short sale or have someone to ask!  Realtors, without experience, should ASK for help from their mentors.  This will not be a typical sale and your lack of knowledge and inexperience could lead to an unnecessary foreclosure. Caution note:   Realtors, Homeowners and buyers, realize these deals are never "for sure" until they close!
Here is a thumbnail of what goes on:

1. Seller calls mtg company and asks what programs they may qualify for, and specifically tell them they are doing a short sale.  Seller asks s for the short sale packet/if mtg co  has one.  It is important in this call to let them know who your Realtor is, and ask for the "agent authorization".  This will give your agent permission to discuss your loan with the mtg. co. (depending on lender, this may all e online).  Sellers are not to move out of the home.  This will add unnecessary complication. 
2. The property needs to be listed, at a price where it will sell.
3. Realtor needs to prepare the info for a short sale packet which will include, but may not be limited to:  a request for help, a hardship letter, agent authorization, 2 months of bank statements, last 2 years of taxes and various forms unique to the lender.   KEEP COPIES!  It is a weird phenomenon but, these things are either lost multiple times or hanging in the big fax machine in the sky.  Seldom if ever, are they acknowledged the first time.  Patience for the Realtor and homeowner is key! 
4. Obtain a fair market (close to) contract.
5. Now, all the submissions to mtg co begin and the clock ticks--maybe up to 6 -8 months,  both buyer and seller, and oh yeah, the Realtors,  just WAIT. 

Please understand, this is just a thumbnail sketch of what to do if you are a Realtor with a listing of this type, or a homeowner "underwater."  The main thing is to "take action."  Ask for help, list the house, sell the house and start the process!
(check out:   http://en.wikipedia.org/wiki/Mortgage_Forgiveness_Debt_Relief_Act_of_2007 )