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Short Sale Approval Letter
When completing a short sale any lien holder that is accepting payment in less than full will need to issue a short sale approval letter which can also be known as a discounted payoff letter. Generally mortgage servicers will issue these type of approval letters and judgements holders or a party collecting on behalf of them may issue settlement letters or partial lien release letters.
A short sale approval letter is the green light to close from that party if you meet the terms of that letter. If you have multiple lien holders you will need multiple approval letters. Ensure to review the letters carefully. If a typo is on the letter in the borrowers name or address that could cause a problem and delay at closing. Also, sort sale approval letters are generally buyer specific even if no buyer name is mentioned. If the buyers name is spelt wrong or if the buyer changes, a new approval letter and potentially a review will be needed on the account.
The approval letter states all the terms of the transaction which may be inclusive of some of the following; The mininum NET proceeds, that the seller may receive $0 dollars from the proceeds of the sale, if relocation money is approved to go to the occupant, what closing costs are approved, if there is a deed restriction period and other imperative information. Depending on the servicer and investor the approval letters may look different or have different verbiage. Reviewing all affidavits and the approval letter that were signed is crucial if you are a buyer, seller, or real estate agent.
If you would like short sale help towards receiving a favorable approval letter or have questions, please fill out the form below or call 1-800-692-9960 and a specialist will be in touch with you shortly.