Comments on: Short Sales & Your 401K http://www.wannanetwork.com/2009/05/08/short-sales-your-401k/ WannaNetwork.com - Connecting Homeowners And Local Real Estate Professionals Fri, 03 Feb 2012 22:30:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Fred Klaus http://www.wannanetwork.com/2009/05/08/short-sales-your-401k/comment-page-1/#comment-303 Fred Klaus Wed, 20 May 2009 21:47:57 +0000 http://wannanetwork.com/shortsales/?p=297#comment-303 A 401K is a protected asset it can not attached by a creditor. The lender can request copies of it, they can even request that you take funds from it, but any withdrawal is volontary. If the short sale file was set up by requesting in writing the loss mitigation package and the loss mitigation package was released in writing and it failed to request savings and checking statments you may be able to get them to relent. If the loss mitigation package was complied from oral or web based stipulations you are likely in a much weaker situation. If the loss mitigation package stipulated that the borrower is to provide checking and savings info or a financial application including assets you are again in a weak position. Note that if the property is located in a state that does not allow for deficiency collections (like CA on a purchase money mortgage)than you would be in a better position. Provide the 401K statements but put them under a cover leter from the borrower that indicates they have no intentions of tapping the protected asset even if it kills the deal. Also indicate on the letter that the short sale with out 401K proceeds is the highest recovery they are going to get. I find that if the borrowers make written proposals to the lender stipulating the terms that are best for them than the lender can, accept, reject or counter offer. You would not orally negotiate a purchase of real estate and you should not orally negotiate short sale terms with a lender. A 401K is a protected asset it can not attached by a creditor. The lender can request copies of it, they can even request that you take funds from it, but any withdrawal is volontary. If the short sale file was set up by requesting in writing the loss mitigation package and the loss mitigation package was released in writing and it failed to request savings and checking statments you may be able to get them to relent. If the loss mitigation package was complied from oral or web based stipulations you are likely in a much weaker situation. If the loss mitigation package stipulated that the borrower is to provide checking and savings info or a financial application including assets you are again in a weak position. Note that if the property is located in a state that does not allow for deficiency collections (like CA on a purchase money mortgage)than you would be in a better position. Provide the 401K statements but put them under a cover leter from the borrower that indicates they have no intentions of tapping the protected asset even if it kills the deal. Also indicate on the letter that the short sale with out 401K proceeds is the highest recovery they are going to get. I find that if the borrowers make written proposals to the lender stipulating the terms that are best for them than the lender can, accept, reject or counter offer. You would not orally negotiate a purchase of real estate and you should not orally negotiate short sale terms with a lender.

]]> By: Paul Jerome http://www.wannanetwork.com/2009/05/08/short-sales-your-401k/comment-page-1/#comment-302 Paul Jerome Sat, 09 May 2009 14:22:24 +0000 http://wannanetwork.com/shortsales/?p=297#comment-302 Hi Elise, I am opinionated on the short sale and <a HREF="http://www.brokencredit.com/?p=1820" rel="nofollow">401k subject</A>. The borrower typically writes ‘survives bankruptcy’ on the financial statement rather than entering an amount. <a HREF="http://www.brokencredit.com" rel="nofollow">Paul Jerome</A> Hi Elise,

I am opinionated on the short sale and 401k subject. The borrower typically writes ‘survives bankruptcy’ on the financial statement rather than entering an amount.

Paul Jerome

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