Sample Short Sale Approval Letters

I am posting the following short sale approval letters to illustrate the difference between a short sale & a short sale with loan settlement.

Take a look at the following Bank of American Short Sale approval letter.

You can see here clearly that the lender is willing to release the lean against the property to allow it to sell for less than the amount owed, but not willing to settle the note the borrower signed promising to pay the principle balance.

Here is a sample Indymac Short Sale Approval letter issued for a Lehi Utah short sale with loan settlement.

You will notice the similarities and differences in the above Indymac short sale approval letter and on the below Orem Utah short sale approval letter with the same lender.

The first letter clearly releases the seller from all obligation to repay the balance, the second clearly reserves the right to collect the balance. Both of these letters were received about the same time from the same department but from two separate Indymac negotiators.

Sample short sale approval letter for EMC mortgage on an Elk Ridge Utah short sale.

Sample short sale approval letter for Wells Fargo on an Orem Utah short sale.

Sample short sale approval letter for AMHSI (American Home Mortgage Servicing) on a short sale in Lehi Utah.

This letter is not quite as clear. It says clearly that is is taking a short payoff on the loan,  doesn’t specifically reserve the right to collect and does not ask for a promissory note.

Sample short sale approval letter for SPS (Select Portfolio Servicing) on an Ogden Utah short sale.

Pretty clear in this letter that the loan is satisfied.

Sample short sale approval letter for LLS- Liton Loan Servicing,  on an Provo Utah short sale.

Good, clean approval letter.

Sample short sale approval letter from Green Tree on an a West Valley City Utah short sale.

The interesting thing on this letter is the way the negotiator named the document in the footer in the lower left hand corner of the approval letter, “note remains”. So getting them to switch to the full satisfaction and release letter is the trick. When I submit a short sale I specifically request a full satisfaction and release. I think in the future I am going to leave the term short sale off of all of the documents.

Most of the time when they issue a release of lean only,  they will also ask for a promissory note detailing the amount of the deficiency and the re-payment terms. So it is very clear that they are asking to be re-payed. Its not a bad idea also to ask your title company to reference the “full satisfaction settlement and release” in the wire transfer along with the borrowers name and account number when they send the short payoff.

The goal for any experience short sale professional is not just to approve the short sale but to settle all leans against the property in the process. This however is getting increasingly difficult. The home owner should be aware upfront that there is always a possibility that the lender will not be willing to settle the account.

Read the following post about settling a Citi Mortgage account when the file has been transferred to the Citi mortgage recovery department.

5293 W BRUSH BAY, West Valley City UT

SOLD!-Short Sale! Asking 169,900K. Subject to 3rd party approval.

Short sale submitted on approx May 4, 2009 to Green Tree only.