MAKING THE SHORT SALE PROCESS WORK FOR YOU

Short sales (or “pre-foreclosure” sales) represent a large portion of today’s market, although
recent data suggests the number is declining. Processing escrow transactions for these
properties can be a difficult task, as no two transactions are completely alike.
Understanding the short sale process, the necessary steps, and the commonly used terms
will strengthen your knowledge and comfort level in this market niche.
A short sale occurs when a property is sold at a price lower than the amount the
homeowner owes on the mortgage, and the homeowner’s mortgage lender(s) agrees to the
“short” payoff.
☆ Preliminary Report – This is the primary tool used to learn what is recorded against a
specific property. The report helps to verify ownership; confirm the correct legal and
property address; and identify mortgages, taxes, delinquencies, liens, and judgments
against the property.
☆ Letter of Authorization – Securing this from the seller allows the lender to speak with
you, your escrow officer and assistants about the short sale negotiation.
☆ Preliminary Settlement Statement/HUD – This document, prepared by an escrow
officer, shows the disposition of funds in the short sale escrow.
☆ Approval Letters – These documents spell out the conditions under which a lender will
agree to the short sale. Lenders have sensitive timelines and conditions that are critical to
the escrow process.
☆ Expiration of Approval Letters and Other Escrow Timelines – Generally, approval
letters expire within 30-45 days. Tiago Title uses internal management guidelines to track
specific short-sale timelines and close the sale before approval letters expire. Remember,
short sale negotiations do not stop the foreclosure process.
☆ Communicate, Communicate, Communicate – The parties must constantly
communicate with the lender as to the short sale’s acceptance status.
At Tiago Title, we provide a team of professionals well versed in the short sale process. We
will ensure that the process is a smooth and easy one for you and your clients.