The one consistent rule in short sales is that the rules will always change!
I have noticed a new trend with all Fannie Mae backed short sales in the last year or so. Once reaching approval stage, 100% of the time Fannie Mae is requesting a cash contribution or large promissory note from all NON-OWNER OCCUPANT short sellers. Lenders have never been as kind to these owners as they consider them “investors”. While asking for cash or notes is not new, Fannie Mae is now religiously requesting the sellers to take on payments for the entire amount of the deficiency!
THE GOOD NEWS? I have found that 100% of the time thus far, these requests are highly negotiable. With a few choice responses, we routinely see these requests go from tens of thousands of dollars (or even over $100,000 in some cases), to a few thousand, or even into the hundreds, and once in a blue moon it disappears altogether (although this is rare lately).
You are more likely to be asked for a cash contribution if you:
Do not occupy the home in question
Are current with mortgage payments
Have good credit and/or assets
If considering a short sale, your best bet for success is to speak with a highly experienced short sale specialist in advance of listing your home, to not only set up proper expectations for how your short sale will go, but also to help prepare for any complications in advance.
Minna Reid is The Broker - Owner of Reid Real Estate Group. Reid Real Estate Group is a full-service Connecticut residential real estate brokerage, specializing in helping homeowners with legal and financial challenges including short sales, probate sales and tax lien complications.