SHORT SALE AUTHORIZATION PACKAGE

IMPORTANT NOTICES

A short sale occurs when a lender agrees to accept less than the full amount owed on a mortgage in connection with the sale of a property. This package includes:

1. Third Party Authorization Form
2. Short Sale Request Letter (Hardship Letter)
3. Required Documentation Checklist

Before proceeding:
☐ Consult with a licensed attorney regarding legal implications
☐ Consult with a tax professional regarding potential tax liability
☐ Work with a real estate agent experienced in short sales
☐ Understand that lender approval is required and not guaranteed

PART 1: THIRD PARTY AUTHORIZATION FORM

AUTHORIZATION TO RELEASE INFORMATION AND COMMUNICATE ON BORROWER'S BEHALF

Date: [DATE]

To: [MORTGAGE SERVICER NAME]
[ADDRESS]
[CITY, STATE ZIP]

Loan Number: [LOAN NUMBER]
Property Address: [PROPERTY ADDRESS, CITY, STATE ZIP]

Borrower Name(s): [BORROWER NAME(S)]
Co-Borrower Name(s): [CO-BORROWER NAME(S)]
Last Four Digits of SSN (Borrower): [XXXX]
Last Four Digits of SSN (Co-Borrower): [XXXX]

AUTHORIZATION

I/We, the undersigned borrower(s), hereby authorize [MORTGAGE SERVICER NAME] and its agents, successors, and assigns to:

1. Release Information To:

☐ Real Estate Agent:
Name: ________________________________________________
Company: ________________________________________________
Address: ________________________________________________
Phone: ________________________________________________
Email: ________________________________________________
License Number: ________________________________________________

☐ Attorney:
Name: ________________________________________________
Firm: ________________________________________________
Address: ________________________________________________
Phone: ________________________________________________
Email: ________________________________________________
Bar Number: ________________________________________________

☐ HUD-Approved Housing Counselor:
Name: ________________________________________________
Agency: ________________________________________________
Address: ________________________________________________
Phone: ________________________________________________
Email: ________________________________________________

☐ Other Authorized Representative:
Name: ________________________________________________
Relationship: ________________________________________________
Address: ________________________________________________
Phone: ________________________________________________
Email: ________________________________________________

2. Scope of Authorization:

I/We authorize the above-named representative(s) to:

☐ Discuss my/our mortgage loan, including payment history, balance, and status
☐ Receive and review documents related to my/our mortgage account
☐ Submit documents on my/our behalf, including short sale applications and supporting documentation
☐ Negotiate the terms of a short sale on my/our behalf
☐ Receive information regarding loss mitigation options
☐ Communicate with your representatives regarding the short sale process
☐ Receive copies of all correspondence related to this matter
☐ Sign non-binding documents on my/our behalf (excluding the actual sale documents)

3. Limitations:

This authorization does NOT permit the authorized representative(s) to:
- Execute any documents that legally bind me/us without my/our explicit written consent
- Modify the terms of my/our mortgage loan
- Accept any settlement or agreement on my/our behalf without my/our written approval

4. Duration:

This authorization shall remain in effect until:

☐ The earlier of: (a) the closing of a short sale transaction; or (b) [DATE]
☐ Revoked by me/us in writing
☐ One (1) year from the date of this authorization

5. Acknowledgment:

I/We understand that:
- I/We remain responsible for all communications and decisions regarding my/our mortgage
- The servicer is not obligated to approve a short sale
- I/We should continue to make mortgage payments if able
- Authorizing a representative does not guarantee any particular outcome

BORROWER SIGNATURE(S)

_________________________________
Borrower Signature

_________________________________
Printed Name: [BORROWER NAME]

Date: _______________

_________________________________
Co-Borrower Signature

_________________________________
Printed Name: [CO-BORROWER NAME]

Date: _______________

PART 2: SHORT SALE REQUEST LETTER (HARDSHIP LETTER)

Date: [DATE]

[MORTGAGE SERVICER NAME]
Short Sale / Loss Mitigation Department
[ADDRESS]
[CITY, STATE ZIP]

RE: Short Sale Request

Borrower Name(s): [BORROWER NAME(S)]
Property Address: [PROPERTY ADDRESS]
Loan Number: [LOAN NUMBER]

Dear Short Sale Department:

I am writing to request approval for a short sale of the above-referenced property. I am unable to continue making my mortgage payments and cannot sell the property for enough to pay off the mortgage balance. I believe a short sale is in the best interest of all parties as an alternative to foreclosure.

PROPERTY AND LOAN INFORMATION

MY HARDSHIP

I am experiencing financial hardship due to:

☐ Unemployment/Job Loss
I lost my job on [DATE] due to [REASON]. I have [been seeking employment for X months / obtained new employment at reduced income].

☐ Reduction in Income
My income decreased from $[AMOUNT] to $[AMOUNT] per month beginning [DATE] due to [reduced hours, pay cut, business downturn, commission/bonus reduction, etc.].

☐ Medical Expenses/Illness
I/my family member has experienced [DESCRIBE MEDICAL SITUATION] resulting in [inability to work, significant medical expenses of $AMOUNT, etc.].

☐ Divorce/Separation
My divorce/separation became final on [DATE], resulting in [loss of income, increased expenses, inability to afford mortgage alone].

☐ Death in Family
The death of [RELATIONSHIP] on [DATE] resulted in [loss of income, unexpected expenses].

☐ Business Failure
My business [NAME] failed on [DATE] due to [REASON].

☐ Increase in Expenses
My monthly expenses increased by $[AMOUNT] due to [REASON: child care, elder care, child support obligation, etc.].

☐ Adjustable Rate Increase
My adjustable rate mortgage reset on [DATE], increasing my payment from $[AMOUNT] to $[AMOUNT].

☐ Natural Disaster
My property/income was affected by [DISASTER] on [DATE].

☐ Military Service/PCS
I am being relocated due to military service effective [DATE].

☐ Other:
[DESCRIBE]

DETAILED HARDSHIP NARRATIVE

[WRITE A DETAILED BUT CONCISE EXPLANATION OF YOUR HARDSHIP. INCLUDE:
- When the hardship began
- What specifically caused it
- How it affects your ability to pay the mortgage
- What you have done to try to resolve the situation
- Why you cannot continue with the current mortgage
- Why a short sale is the best option for all parties]

Example:
"In March 2025, I was laid off from my position as [JOB TITLE] at [COMPANY] due to company-wide downsizing. Despite actively searching for employment for the past [X] months and applying to over [X] positions, I have been unable to find comparable employment. I have depleted my savings trying to keep current on the mortgage. My unemployment benefits have ended, and I am now unable to make the monthly mortgage payment of $[AMOUNT]. The property is currently worth approximately $[AMOUNT], which is less than the $[AMOUNT] owed on the mortgage. A short sale will allow the property to be sold at fair market value, avoiding the additional costs and time associated with foreclosure. I am committed to cooperating fully with the short sale process."

WHY SHORT SALE BENEFITS ALL PARTIES

A short sale is preferable to foreclosure because:

For the Lender:
- Higher recovery than foreclosure (typically 10-20% more)
- Faster resolution than foreclosure process
- Avoids costs of foreclosure proceedings, property maintenance, and REO disposition
- Property transferred in better condition
- Reduced legal liability

For the Community:
- Maintains neighborhood property values
- Avoids vacant/blighted property
- Keeps property occupied and maintained

For Me:
- Less damaging to credit than foreclosure
- Ability to relocate on my timeline
- Potential for relocation assistance
- Closure and ability to move forward

CURRENT MARKET CONDITIONS

[DESCRIBE LOCAL REAL ESTATE MARKET CONDITIONS THAT AFFECT PROPERTY VALUE - e.g., declining home prices, high inventory, foreclosures in area, etc.]

MY COMMITMENT

I am committed to:
- Cooperating fully with the short sale process
- Providing all requested documentation promptly
- Keeping the property in good condition
- Allowing property showings
- Vacating the property promptly upon closing

LISTING INFORMATION (If Property is Listed)

☐ The property is currently listed for sale:
- Listing Agent: [NAME]
- Brokerage: [COMPANY]
- Listing Price: $[AMOUNT]
- MLS Number: [NUMBER]
- Days on Market: [NUMBER]
- Number of Showings: [NUMBER]

☐ The property is not yet listed. I am prepared to list immediately upon approval of this request.

PURCHASE OFFER (If Offer Received)

☐ I have received a purchase offer:
- Buyer: [NAME]
- Offer Price: $[AMOUNT]
- Offer Date: [DATE]
- Earnest Money: $[AMOUNT]
- Proposed Closing Date: [DATE]
- Contingencies: [LIST]

A copy of the fully executed purchase contract is attached.

REQUEST

I respectfully request that you:

1. Review this short sale request
2. Approve the short sale of the property
3. [Waive any deficiency / Accept [AMOUNT] for deficiency / Other: SPECIFY]
4. Allow sufficient time to complete the sale

Thank you for your consideration. Please contact me or my authorized representative at the contact information below if you need any additional information.

Sincerely,

_________________________________
[BORROWER NAME]
[PHONE NUMBER]
[EMAIL ADDRESS]

PART 3: REQUIRED DOCUMENTATION CHECKLIST

Documents to Submit with Short Sale Package

Authorization and Request

☐ Completed Third Party Authorization Form (Part 1)
☐ Signed Short Sale Request Letter/Hardship Letter (Part 2)
☐ Completed servicer's short sale application form (if required)

Identification

☐ Copy of government-issued photo ID (driver's license, passport)
☐ Copy of Social Security card (or document showing SSN)

Income Documentation

For Employed Borrowers:
☐ Pay stubs for last 30 days (all borrowers)
☐ Last 2 years of W-2 forms
☐ Last 2 years of federal tax returns (all pages and schedules)

For Self-Employed Borrowers:
☐ Last 2 years of federal tax returns (all pages and schedules)
☐ Year-to-date profit and loss statement
☐ Last 2 years of business tax returns (if applicable)

Other Income:
☐ Social Security/Disability award letters
☐ Pension/retirement income statements
☐ Unemployment benefit statements
☐ Child support/alimony court orders and proof of receipt
☐ Rental income documentation

Asset Documentation

☐ Last 2 months of bank statements (all pages, all accounts)
☐ Investment/brokerage account statements
☐ Retirement account statements (401k, IRA, etc.)

Expense Documentation

☐ Monthly expense worksheet or budget
☐ Copies of monthly bills (utilities, insurance, etc.)

Property Documentation

☐ Copy of recorded deed
☐ Property tax statement
☐ Homeowner's insurance declaration page
☐ HOA statement (if applicable)
☐ Copy of listing agreement
☐ Comparative Market Analysis (CMA) or Broker Price Opinion (BPO)
☐ Copies of property photos

Hardship Documentation

☐ Unemployment benefit letter (if applicable)
☐ Termination or layoff letter (if applicable)
☐ Medical documentation (if applicable)
☐ Divorce decree or separation agreement (if applicable)
☐ Death certificate (if applicable)
☐ Military orders (if applicable)

Purchase Offer Documentation (if offer received)

☐ Fully executed purchase agreement
☐ Buyer's pre-approval or proof of funds letter
☐ Earnest money receipt
☐ Estimated closing statement (HUD-1 or Closing Disclosure estimate)
☐ Addendum for short sale contingency

Additional Loan Documentation (if applicable)

☐ Second mortgage/HELOC information and contact
☐ Prior loan modification documentation
☐ Prior loss mitigation correspondence

SUBMISSION INSTRUCTIONS

Submit complete package to:

[MORTGAGE SERVICER NAME]
Short Sale Department
[ADDRESS]
[CITY, STATE ZIP]

Fax: [FAX NUMBER]
Email: [EMAIL]
Online Portal: [WEBSITE]

Important Tips:

1. Keep copies of everything you submit
2. Send via certified mail with return receipt or fax with confirmation
3. Follow up within 3-5 business days to confirm receipt
4. Respond promptly to any requests for additional documentation
5. Note names, dates, and reference numbers of all communications

STATE-SPECIFIC NOTES

CALIFORNIA

• California Civil Code Section 580e may provide deficiency protection for short sales
• California Homeowner Bill of Rights applies
• Seller may request release from deficiency liability
• Transfer tax exemptions may apply

TEXAS

• Texas Property Code governs short sales
• No deficiency on home equity loans (Texas Constitution)
• Texas real estate commission rules apply
• Get deficiency waiver in writing

FLORIDA

• Florida Statute Section 702.06 addresses deficiency after short sale
• Deficiency judgment possible unless waived in writing
• Florida real estate commission rules apply
• Documentary stamp tax applies

NEW YORK

• New York Real Property Law applies
• Deficiency possible unless waived
• Transfer taxes apply (state, city, mansion tax)
• Real estate commission rules apply

TRACKING LOG

This template is provided for educational and informational purposes only. Short sales require lender approval and involve complex legal, financial, and tax issues. Consult with a licensed attorney, real estate professional experienced in short sales, and tax advisor before proceeding with a short sale.