We had a recent report that a Seller had received some bonus income money. They were concerned that the short sale Lender upon seeing a large deposit might decline their ability to qualify for financial hardship. The Seller was also behind on other bills and payments due. Several creditors were threatening garnishment/collection activity.
The Seller opened a new account with a different bank and did not provide this information to the short sale Lender. The short sale Lender found this information out and declined the sale because they interpreted the information as not reporting all bank account and monies received.
Further research indicated that the Seller opened and account at an F.D.I.C. Insured Lender and that information is then reported to other Lender Members of FDIC (which the short sale Lender is also a member) .
As a solution, I encourage my Sellers to report all income as chances are the sale would still be approved because the seller still has a financial hardship even though they have some additional temporary monies. The Seller should "disclose" these monies and any new bank statements.
The Sellers should obtain legal advice on their fear of "ganishment/collection activities".
Steve Simonetti, CDPE
Certified Distressed Property Expert
Broker Associate