Can I get cash back from my short sale?
Posted by Minna Reid on Tuesday, January 10th, 2012 at 3:49pm.Usually the answer is no. As a condition of any short sale approval, the lender will usually require the seller have no proceeds from the sale. However – there are a few instances where the seller can in fact be paid an incentive from a short sale. These are:
FHA short sales. In an FHA short sale the seller is allowed an incentive of $1,000 during the first 90 days of the ATP, and $750 thereafter. If there are unapproved closing costs, these funds may used and any payments to junior lien holders (if any) must first be paid through the use of this incentive, before it will be paid to the seller.
HAFA short sales. HAFA promises $3,000 to the seller, however these funds may also be distributed towards unapproved closing costs. As a general rule, I have found HAFA is just not worth pursuing even considering the $3,000.
Traditional short sales. Some lenders in-house short sale programs will allow the seller some type of incentive. These are not exactly common, but they are allowed in some case, so it is always worth asking during the course of the short sale.
Overall, you can most likely assume you will not receive any cash out of your short sale closing and if you do it will be a pleasant surprise.
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[...]Insist on the lender giving you a huge wad of cash or refuse to close. You read the news! You know some people get paid big bucks by the lender to short sell – you want $25,000 too!
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