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example of letter of explanation of short sale for new home loan?

by Wade Morris Dunwoody Realtor on February 11th, 2012
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about the author Wade Morris
I’m part owner of Home Source Group of REMAX Greater Atlanta Realtors® specializing in Atlanta Homes in Brookhaven, Chamblee, Dunwoody, and Sandy Springs. Whether you are buying or selling your home we work with resale’s, first-time home buyers, companies relocating people to Atlanta, and most home sellers in northern part of the Greater Atlanta area.
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  1. the kid permalink

    I bought a house I couldn’t afford and then the bubble burst and I felt like I had to sell the house, so I did and the lender lost money.

  2. acermill permalink

    Why would you need to explain a short sale for a new home loan ? The new lender knows exactly what you did. You sold your former property for less than you owed on the property, and caused the lender to lose money. The new lender will not care WHY you did this. They will only be concerned that you DID stiff your previous lender.

  3. GVD permalink

    As usual, people answering that don’t know a thing about finance.

    You will need a letter of explanation as to the short sale when you go to purchase a new home and the new lender WILL care why. The letter needs to state the reasons for the sale. Any extenuating circumstances will need to be documented, such as layoff, divorce, illness, etc. Obviously if you write that you short sold to repurchase at a lower market price, your loan will be denied; so if that’s the reason don’t waste your time. Be honest in the letter and if you are eligible for repurchase given the designated timeframes, you will be fine.

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