All short sales have a generic process in place but will vary with each lender.

Here is a typical timeline when working with a lender’s loss mitigation department:

1) As the seller, give authorization to your real estate agent to speak on your behalf. (Allow 48 hours to acknowledgment by the lender)

2) Fax in a short sale package and allow 72 hours for acknowledgment from the lender. Due to the number of incoming short sale cases, many loss mitigators have their hands full. Make sure to keep an extra copy of your short sale package in case you need to mail in a copy or fax it again (paperwork can get lost, even after the lender has received it)

3) A loss mitigator will be assigned to the short sale account within 7 to 10 business days.

4) Once the loss mitigator has been assigned, they will take about 30 to 45 days to review your short sale case.

To expedite the short sale process make sure you do the following steps:

1) Make sure your short sale package is very thorough. You will need to include all necessary documents as requested by the bank, such as bank statements, contract, net sheet and hardship letter. Make sure you send everything at once so that papers are not lost.

2) Make sure you get the correct number to the right department. Write down the phone number of your contact for follow up and the name of the negotiator’s first and last name. Ask for specific spelling if you have to. If you can get an email address, utilize it! Sending emails is a great way to remain in contact with the loss mitigator without getting lost in the pile of paperwork.

Tips for Submitting Short Sales Packages to Lenders:

1) When sending a short sale package, break up the faxes up into sections of no more than 10 pages. If you have 40 page to send, you will need to send 4 faxes (10 pages per fax). Send the financials in one fax, the contract in another. Try to keep the sections together. In addition, write the account number at the top of every faxed page you send. (Source)

2) Persistence pays off. If you haven’t received paperwork from your lender, request it over and over again until you get something. When in doubt, ask for a supervisor.

3) You will typically need to wait a couple of weeks before you know if an offer has been declined or accepted. You will have to wait long periods, sometimes as long as 2 months!

4) Buyer’s offer is to reflect urrent market conditions and come in under fair market price. For a short sale offer to succeed, it must meet the investor requirements or otherwise be denied. If the short sale offer also has too many concessions from the seller, the short sale may fail.

5) Remove impediments that could slow the progress on short sales such as the appraiser having difficulty accessing the interior of the property. It will take longer to complete the necessary evaluation process for the lender.

6) Don’t move out of the property prior to completion of the short sale. The bank may consider the property abandoned.

There are pros and cons to short sales, but given the right situation, the benefits can be great to the seller and buyer.

Here is a list of lender phone numbers to get a hold of their loss mitigation departments.

Chase Short Sale
Phone: (800) 548-7912
Loss Mitigation Department Phone: (877) 838-1882 ext 52195. You will be redirected to (866) 665-7629.
Business Hours:
11AM-8PM Monday-Thursday
8AM-12PM Friday

Countrywide Short Sale
Loss Mitigation Department Phone: (800) 262-4218

Citimortgage Short Sale
Loss Mitigation Department Phone: (301) 696-5096 or 301-696-4267

GMAC Short Sale
Loss Mitigation Department Phone: (800) 850-4622

HSBC Mortgage Short Sale
Loss Mitigation Department Phone: (888) 648-3124

Ocwen Short Sale
Loss Mitigation Department Phone: (800) 746-2936

Wachovia Short Sale
Loss Mitigation Department Phone: (866) 642-8608

Washington Mutual Short Sale
Loss Mitigation Department Phone: (866) 926-8931 or (888) 453-3102 or (800) 478-0036 or (800) 254-3677

Wells Fargo Short Sale
Loss Mitigation Department Phone: (877) 216-8448 or (866) 261-5642 or (800) 766-0987 or (800) 678-7986.
Business Hours:
8AM-9PM Monday-Friday
9AM-2PM Saturday

Many involved in the process can agree that there is NO logic in the short sale process and NO one time-line to be followed (a contributing factor as to why many short sales fail). In fact, the typical home selling/buying process is completely thrown out the window leaving everyone except the bank insecure in the future of the deal.

It’s important for buyers of short sales to remember that submitting an offer to the bank with a response deadline, even an offer with the listing price offered, doesn’t guarantee a speedy response from the bank or lender. There are no deadlines once an offer is submitted.

Recently, the Obama administration created a modification to the existing mortgage foreclosure program to streamline the short sale process to assist lenders, real estate professionals and homeowners to close short sales. Unfortunately the new guidelines fall short to accomplishing their intended goal and participants in short sales grow frustrated due to the long delay period which accumulates interest, taxes, insurance, maintenance and expenses.

In short sales, the purchase price is less than the amount needed to pay off the outstanding mortgage. The lender must agree to waiving the deficiency or negotiate with the borrower a settlement amount.

The Obama administration has attempted to address short sale concerns:

1) Borrowers with 2nd home mortgages or investment properties are eliminated from the program.
**Borrowers are excluded which represent a large portion of those affected by the foreclosure crisis. It’s estimated that more than 50 percent of loans in foreclosure have 2nd mortgages.

2) The short sale seller must apply and qualify for the mortgage modification program.
**This requirement creates more red tape for a home sale that doesn’t require a modification to the mortgage.

3) $1,000 “incentive” for a lender to participate in the short sale.
**A $1,000 benefit to a lender is a marginal benefit in their books.

In short, the administration must provide positive and proactive procedures to hasten banks to close on short sales and thus, avoid more foreclosures entering the market.