How is a Short Sale Conducted?
Full Question:
Answer:
Generally, the mortgage company does not assign the mortgage to the buyer in a short sale. The seller does not receive any funds in a short sale. The lender is a third party to the sale and each lender has its own requirements for approving a short sale. The buyer arranges his/her own financing, whether by obtaining a mortgage or paying cash, and the seller's lender issues a release of the mortgage lien to the seller. When the short sale package is presented to the short sale lender, a pre-approval letter or proof of funds from the buyer must be included. The pre-approval letter can be for any type of loan, including FHA. The seller will not be allowed to receive any funds at the closing.
For further discussion, please see:
http://activerain.com/blogsview/1280312/how-to-buy-a-short-sale-house-hemet-ca-