The File

So when I say that "the file has been submitted" or "the file is in review," what exactly does that mean?

The file or the package variously refers to the offer that the bank is reviewing. The file is assembled at your short sale negoitator's office out of various components that the bank will need for the review of a short sale. The file, once with the bank, becomes more of an idea or symbol, as it is the instance of the offer being pushed through the motions at the bank, investor, and (sometimes) the mortgage insurance company.

At the start, the file is a stack of paper containing, but not limited to:

• The Purchase Agreement (The Contract) - The actual offer document for the sale of the property along with its various addenda and disclosures.

• The HUD1 Sheet - A worksheet showing where the money is going in the transaction. This accounts for payoffs to the bank, commissions, taxes, fees, and more.

• The Letter of Authorization (LOA) - A document signed by the seller(s) indicating that we can speak with the bank on their behalf for the negotiation of the short sale.

• The Hardship Letter - A signed and dated letter from the seller(s) specifically outlining why they need to sell their property short. Common reasons include loss of income, excessive debt and/or expenses, divorce, and death in the family.

• The Buyer Prequalification / Preapproval / Proof of Funds - A document demonstrating that the buyer will be able to purchase the property.

• Seller Paystubs - One to two months' worth of documentation of the seller's income. This can be in the form of paystubs, profit and loss sheets, or award letters (for social security, unemployment, or VA benefits.)

• Seller Bank Statements - Complete bank statements with all pages included for all accounts.

• Two Years Tax Returns for the Seller - Must be signed and dated.

• The form 4506t - A form allowing the bank to request tax transcripts from the IRS.

• The Listing Agreement - The document that the seller signs with their agent to put the property on the market.

• The MLS/MRIS Sheet - A printout showing the specific details of the property as it was listed.

This is faxed or emailed into the bank for review by their representatives, processors, negotiators, and supervisors. These are the various people with whom your negotiator will discuss the progress of your file.