What exactly is a short sale? Here is the directive for short sales that is pertinent information, as it speaks to closing costs which are allowed and not allowed pertaining to FHA and Conventional loans. http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_14626.pdf
HAFA Short Sales A short sale is the sale of real property which falls short of the amount due on that property’s mortgage(s). Since it means that the lender(s) will discount their debt(s) and take a loss on their investment, the sale must be approved by the lender(s) on all mortgages and liens on the property. A short sale is generally approved only as an alternative to foreclosure. The lender on your first mortgage has the first right to the proceeds from the sale because they have the first right to foreclose on the property in case of default. If you have other mortgages or liens on that property, you must be able to get those lenders to release their lien on the title to your property before the original lender can accept the deed. Just like in other real estate transactions, the title must be clear when it is transferred through a short sale. You must agree to work together with your original lender, real estate agents and brokers, appraisers, title companies, mortgage insurance companies, and all other lienholders in order to avoid foreclosure through a short sale. When your first mortgage lender agrees to accept a short sale under HAFA, they must agree to give up their right to ask you to repay any part of that debt, whether by cash, a promissory note, or a default judgment in court. The other lienholders may require cash, a promissory note, or a combination of both before they will agree to release their lien. Be prepared to negotiate terms with them.
Above Information provided by http://hafa-program.com/home/what-is-a-short-sale.html
ADVISORY: SEEK THE PROFESSIONAL ADVICE OF A PROFESSIONAL ATTORNEY, CPA FOR LEGAL QUESTIONS BEYOND MY SCOPE AS A REALTOR IN REGARDS TO ANY SHORT SALE INFO PROVIDED !
FANNIE MAE HAFA GUIDELINES Very Timely and important new rules and guidelines! Please read for short sale and deed in lieu updates!
