Owning homes is not what the mortgage guys are in business to do. They take on property taxes, liability, and many other obligations that come with home ownership. This is why many bank owned properties are liquidated at a discount and come with no warranty.
Back to the finances, proving insolvency is important for a homeowner to do while completing a short sale. The money that is coming in cannot be more than the money that goes out. They are not out to steal your retirement and at the same time they do not want to relieve someone's debt if they can afford the payments.
Many times you will be asked to provide a financial worksheet that itemizes every dollar spent from groceries to utility payments. During this financial analysis if they determine that a seller is insolvent and cannot afford their debt it is a big first step in moving forward with a short sale.
Be prepared to provide bank statements, pay stubs, 2 years tax returns, and proof of payments when it relates to automobiles and other high dollar obligations. It is a burden to track all of this down and when you consider the amount of debt the bank is willing to relieve it is understandable that they perform this level of due diligence.
If you have questions about short sales, foreclosure, or anything else relating to this topic give us a call at 509-850-1900. We'd be happy to discuss your options.
