What documents do I submit to the lender to speed up my short sale…MARS, RMA, Frank Dodd..Help!!
Is there a standard document set to submit to short sale lenders is a question that comes up often. I’m going to cover four necessary documents and one potential document depending on your borrowers circumstances. Since it’s Christmas I will be giving you this document set. And of course the CYA part of the blog….I”m not an attorney or CPA.
The first document that needs to be filled out at the signing of the documents is the MARS documents. Mortgage Relief Assistance Relief Services was passed December 29th 2010 as Rules (16 C.F.R. Part 322) and enacted February 2011. The premise of this rule is to limit the amount of mortgage fraud and to offer a form of consumer protection. Download the rule here to educate yo-self. The basic premise of this document is to ensure no upfront fees are being collected from the distressed seller in order to perform any assistance due to the rampant amount of desperate consumers getting promised the world, paying an ass-load upfront in fees and ending up with nothing in return i.e. ripped-off. There are additional disclosures such as not attempting to practice law or commit fraud.
The second form is the 4506-T which is the form that allows the lender to request filed tax returns. They do this as a verification mechanism to ensure that tax returns and financial sheet submitted is 100% correct and legitimate.
The third form is the Freddie Mac financial form. This form is generally accepted by most lenders to illustrate the sellers assets and liabilities. Most of the investors behind the note is either Freddie or Fannie however, some local portfolio lenders or regional banks may have there own document in which the seller can just transfer the information over to.
The forth form is the Affidavit of Arms Length is a document that has gained huge attention in the past couple of months. A lot of mortgage service companies have implemented this however now the GSE’s are going to be implementing this starting the first of 2012. The arms length affidavit is essentially in place to prevent a seller from lease their property back and executing an option at 50% of what they initially bought it for. This took place a lot in the beginning of the melt down.
Now here is where the road splits between left and right for an investor versus a Realtor handling a short sale. As an investor, Prive Investments LLC, our negotiators never include the HAMP documents however, as a Realtor you should if your client meets the criteria for a HAMP short sale. The Home Affordable Modification Program may allow the homeowner to modify their existing mortgage (only about 5%-10% get approved) or enroll into the short sale program, or if the short sale program fails agree to a deed in lieu. As a Realtor you really have to read and comprehend the publication supplemental. Getting to the point..the document that gets left out often is the Dodd-Frank Certification. This certification is a statement by the homeowner stating they have not engaged in nor attempting to engage in fraud.
I know some of the documents seem redundant but if you want to get quick acceptance by lenders, you need to know how to stack the package correctly!
Now of course other documents that need to be submitted if you are flipping are the Offer letter, table of Contents, Addendum, Net Sheet etc which I will make available at another time as I will be offering our automated document set in the near future.
Oh to get the documents mentioned in this post just tell me where to send them too!
