HECM Short Sale Packet

HECM Short Sale Packet
Thank you for contacting Financial Freedom regarding a potential short sale. All of the guidelines and
requirements needed to submit a complete short sale request are explained in this packet. It is important that you
and/or your designated agent review this packet in its entirety. This introduction provides general guidelines for
short sale consideration and explanations for several of the documents needed to consider your offer.
Enclosed you will find the information you will need to request a third party short sale. A checklist is enclosed
which you may use to confirm you have compiled a complete third party short sale request prior to submission
including an authorization form for your designated agent, and information regarding the different documents
and guidelines needed for a short sale consideration.
Short sales may take up to 90 days to complete. It is always recommended that potential buyers be aware of the
processing time so there are no misconceptions. Once ALL of the required items are complete, please
submit the Short Sale Packet to the email or fax number listed below. All requests will be reviewed in the
order in which they are received.
FAX: (866) 557-1224, Attn: Short Sale Department
EMAIL: [email protected]
If you have any questions you are welcome to call 866-727-4303 for assistance.
Submitting a short sale request or receipt of an approval of your request will not stop foreclosure
proceedings or postpone the initiation of foreclosure unless prohibited by law.
This is a communication from a debt collector attempting to collect a debt. Any information obtained will
be used for that purpose. However, if you have filed a bankruptcy petition and there is either an
“automatic stay” in effect in your bankruptcy case, or your debt has been discharged pursuant to the
bankruptcy laws of the United States, this communication is intended solely for informational purposes.
Please be advised that if you have filed for bankruptcy and your loan is subject to the automatic stay, or if
your debt has been discharged in bankruptcy, this letter is for informational purposes only and is not an
attempt to collect a debt. If your debt has been discharged, this letter is for the sole purpose of
protecting a lien interest in the underlying mortgaged property and is not an attempt to recover any
amounts from you personally. The foregoing notice has no effect on any bankruptcy plan, and you should
continue to make any payments thereunder. If you have any questions about this notice, you should
consult with your bankruptcy attorney and/or your bankruptcy trustee.
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HECM Short Sale Packet
HECM LOANS
(HOME EQUITY CONVERSION MORTGAGE)
APPRAISALS
An interior appraisal is required as an exterior appraisal cannot be accepted to determine the fair market value
of the property. On FHA insured loans, the appraisal must be ordered by Financial Freedom and it is valid for
120 days from the effective date of the appraisal. Please refrain from ordering an appraisal as it cannot be used
to consider the offer. If an appraisal is required, the contact information provided on the short sale checklist
will be used to schedule an appointment for access to the property. An appraisal will not be ordered until the
required documents listed below have been received by Financial Freedom.
DOCUMENTS
A complete short sale packet will include the following documents:
 The completed Short Sale Checklist
 Letters of authority if the borrower is deceased
 The completed and signed Authorization form for your designated agent
 A signed purchase or sales agreement/contract
 A preliminary HUD-1 Settlement Statement
HUD-1 Settlement Statement Approved Deductions and Guidelines:
•
•
•
•
•
•
•
•
Real Estate Taxes due up to the date of closing
Real Estate commission not to exceed 6%
Title Search
Owner’s Title Insurance
Local state/city/county Deed Tax Stamps or Transfer Tax
Any state/city/county specific fees will require additional documentation to show the expense is the
seller’s responsibility and the amount of the expense.
Attorney fees will only be considered in areas where it is mandatory or customary for an attorney to
facilitate the closing in a real estate transaction. To consider attorney fees the following documents are
needed for review: Itemized invoice and supporting documentation such as an ordinance or state statute
to show the mandatory or customary practices of your area.
Utilities: municipal utility fees are the responsibility of the borrower and/or their estate, and will not be
considered as deductions unless they are recorded liens against the property. A copy of the recorded lien
must be provided for review. The recorded document must include the recording stamp.
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HECM Short Sale Packet
SHORT SALE DEDUCTIONS NOT ALLOWED
Listed below are fees which are not allowed as deductions from the proceeds of the sale. If any of these items
are shown on the HUD-1 Settlement Statement and are deducted from the sales proceeds, the short sale
offer will be denied. The list consists of general terms to outline the types of fees which will not be considered,
but is not limited to these fees. The fees will not be considered and this will cause the HUD-1Settlement
Statement to be rejected which will delay the approval process.

Buyer’s Credits

Lien Search

Courier fee

Notary

Document pre fee

Origination fee

Escrow fees

Probate costs*

Express mail

Recording Fees**

HOA/Condo fees

Release fee

HAFA/Homeowner
Inventive Program

Repairs

Seller concessions

Home warranty fee

Settlement/Closing fee

Inspections

Survey fee

IRS liens

Title company fees

Junior Liens

Utilities

Lender fee

Wire fee
*Probate costs: Fee for recording a death certificate, trust affidavit fees, filing fees, and any other costs
associated with the estate or trust.
** Recording Fees: Financial Freedom will execute and submit for recording the release of mortgage at no
cost to the seller or buyer. HUD will do the same for their release of mortgage.
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HECM Short Sale Packet
SHORT SALE CHECKLIST
**Use this page as the coversheet of your short sale packet**
This checklist has been compiled to assist you with submitting a complete short sale packet. Send complete
packets, even if only revising documents as incomplete packets will not be reviewed. Below is the list of
documentation needed for review on any short sale offer. All complete short sale packets will be reviewed in
the order they are received. Thank you.
Short Sale Checklist (Please use this as page one of the packet)
Letters of authority
The completed Authorization form which is enclosed in the packet
Signed sales contract/purchase agreement
Preliminary HUD-1Settlement Statement
Itemized Invoices/Bills for all deductions on the HUD-1, where applicable
Appraisal Contact. This is the person who will allow the appraiser access to the property.
Name: ______________________________ Phone: ____________________________
Please send the offer to:
FAX: (866) 557-1224, Attn: Short Sale Department
EMAIL: [email protected]
Financial Freedom Borrower(s) Name
LAST
FIRST
MIDDLE
LAST
FIRST
MIDDLE
Property Address:
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HECM Short Sale Packet
AUTHORIZATION
I hereby authorize Financial Freedom to discuss my request for a short sale with the individual(s) that I have
identified below as my designated agent(s). Further, Financial Freedom is hereby authorized to negotiate the
terms of the short sale with my designated agent(s) and deliver documents to my designated agent(s) related to
my request for a short sale. I understand that I will be fully responsible for reviewing any information that is
sent by Financial Freedom to my designated agent(s). This authorization will remain effective until I
specifically notify Financial Freedom in writing that this authorization is no longer valid.
NOTE: If you would like Financial Freedom to discuss your account with a third party such as a friend,
realtor, attorney, etc. you MUST complete this form. Please fill out one form for each third party.
My Designated Agent is:
First Name: ______________________________________________________
Last Name: ______________________________________________________
Company: ______________________________________________________
Address: ________________________________________________________
________________________________________________________________
Email Address: ___________________________________________________
Phone Number: __________________________________________________
Fax Number: ____________________________________________________
Relationship to you: ______________________________________________
Borrower or the Borrower’s Authorized Representative’s Signature:
Name: ____________________________________
Signature: ________________________________
Date: _____________________________________
Financial Freedom Loan Number
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