(TUCSON, AZ.) The role of the mortgage company/loan servicer in a ‘short sale’/

In the first article of the series, the discussion was centered on who are the players in a short sale transaction. If all other options have been exhausted and the only reasonable solution is a short sale, the lender/loan servicer should be contacted as quickly as possible. If payments have not been made on the mortgage for a lengthy period of time and/or there has already been a Notice of Trustee Sale recorded, completion of a successful short sale becomes more difficult. Homeowners should consult with a real estate attorney and a qualified tax advisor to understand their individual situation and options, and should seek the help of a qualified and experienced real estate agent @
Before calling the mortgage company, there are several items a homeowner should have readily available. First, they should be prepared to provide the lender an explanation of the financial situation and to demonstrate the inability to make mortgage payments. Typical acceptable hardship situations include life events such as catastrophic medical illness, job loss or relocation, divorce or curtailment of income. The lender will require income verification or evidence of unemployment, bank statements and a financial analysis outlining monthly expenses. Homeowners cannot simply stop making mortgage payments because the mortgage is “underwater.” Homeowners who are able to make monthly mortgage payments may not be approved for a short sale. Most mortgage company websites are now providing comprehensive information for homeowners in distress outlining the steps and documentation that will be required by that lender.
There are multiple short sale programs available for borrowers in distress. If a homeowner has an FHA loan, FHA may approve a pre‐foreclosure sale through the FHA Pre‐Foreclosure Sale Program. The financial hardship is documented and the lender/loan servicer submits a request for a pre‐foreclosure sale to the Department of Housing and Urban Development (also known as HUD). If approved, HUD provides the homeowner and the listing agent a timeline for marketing, typically 120 days, along with a pre‐approved list price and the minimum proceeds requirement. HUD may also provide up to $1,000 financial incentive to assist the homeowner with relocation expenses. For more information on this program, visit
Under the Making Home Affordable Program introduced by the Obama administration, homeowners may also qualify for Home Affordable Foreclosure Alternatives, or HAFA. The US Treasury first introduced this program effective April 30, 2010 to assist homeowners who did not qualify for a modification under the Making Home Affordable Program, and therefore needed to short sale a property. Fannie Mae and Freddie Mac have now issued very similar versions of HAFA. Under these programs, primary and junior lien holders must agree to release the debt completely with no deficiency balance judgments permitted in the future. Homeowners may also receive up to a $3,000 financial incentive to assist in relocation expenses. The lender/servicer will require your home to be listed with a professional REALTOR®.
These programs can be complex and are administered slightly differently with each lender/servicer. However, the guidelines and forms used have been streamlined. Hiring the right professional who has experience and training in navigating these programs is imperative. For more information on how these programs work visit, or or contact your Real Estate agent at
In the next article: further discussion regarding the potential impact of a short sale; credit, tax and deficiency implications.

This article was written and submitted by the Long Realty Short Sale Resource Group. For more information, please visit

Joyce Corsi Hazen, REALTOR, CNE, SFR

Long Realty  Arizona Properties

Cell: 602-284-9822  Fax: 623-505-4346


About Joyce Hazen, REALTOR, CIPS, CNE, SFR

An Arizona and Greater Metropolitan Phoenix Realtor, I am a full service professional with an International Designation, CIPS, who works with Buyers, Sellers & Investors all around the world. I have experience in both the residential and commercial communities. In addition, as a Certified Negotiation Expert I work my hardest to utilize my negotiation skills to benefit all clients. I also speak French, English and Italian. Originally from Canada, having moved to the Valley in 2000, I pay special attention to your personal individual needs and desires, to find you the home, land, or building that you’ve been dreaming of. Real Estate has given me the privilege of working with so many wonderful people and with my knowledge, tools and skill set I have been fortunate to realize that individual needs change from person to person, business to business, culture to culture, and that every request is important to you. For that very reason, when I embark on a journey, I work closely with you, whether you are buying or selling a home or commercial space, whether it is a tradition sale, short sale or foreclosure. I will help you as I am highly motivated, results driven and have taken time to research the marketplace, trends and opportunities to know how to best serve you. With my experience, culture and languages, you can rest assured that your best interests are my priority. I will help you find the home or property of your choice and professionally negotiate on your behalf. It is for these reasons that so many of my clients refer me to their friends and families. The Valley of the Sun has been one of the fastest growing U.S. metropolitan communities, Phoenix has grown tremendously over the past couple decades. Financial Institutions are working with Americans, offering terrific mortgage deals, as well as with foreign investors who are interested in purchasing second homes… the opportunities are endless. My mission and goal is to provide you with superior service. Welcoming new residents to Arizona including Americans and International clients who want to relocate permanently, a home away from home or to escape cold winters, is a pleasure! I enjoy meeting new people and always set my goals high and strive to achieve them. If you’re ready to search for the perfect property, I am here to show you the very best homes that meet your criteria.
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