How Does a Homeowner Qualify for a Short Sale?

How Does A Homeowner Qualify for a Short Sale?

There are four criteria a homeowner must meet to qualify for consideration by the lender for a short sale.  These are:

• There must be a demonstrable financial hardship, e.g., a lost job or material change in the financial situation;
• · There must be a monthly shortfall;
• · There must be insolvency, meaning that the owner does not have the money to pay down the mortgage; and
• · The owner does not have any assets to sell to pay for the shortfall.

What is Considered an Acceptable Hardship to Qualify for a Short Sale?

There must be a hardship that is preventing the owner from being able to pay their mortgage.  Examples include: 

• · Loss of job
• · Business failure
• · Damage to property
• · Death of a spouse
• · Death of family members
• · Severe illness
• · Divorce
• · Mandatory job relocation,
• · Medical bills
• · Military service
• · Payment increase or Mortgage adjustment
• · Insurance or tax increase
• · Reduced income
• · Separation
• · Too much debt
• · Incarceration