Morgan Foreman’s Blog

One major short sale concern of the bank is investing the time and effort in arranging a short sale then having the purchaser not close on the short sale. Because of this possibility you may expect the bank to ask for a “Proof of Funds Letter” or a “Mortgage Commitment Letter” as a required part of the short sale package.

This request is usually a major hurdle for real estate investors that are flipping the deal with what is known as a double closing or simultaneous closing. What to do?

Here are a few possible (remedies|solutions} for the required proof of funds letter:

This document can be acquired from your bank, mortgage broker, private money lender, hard money lender, or anybody that has the facility to provide transaction funding.

I am not keen on the Mortgage Commitment Letter because a bank issues a loan commitment after it has authorized both the house and you. For that I feel a commitment letter is better suited for purchasing homes that don’t involve a short sale.

-Home Equity line ( HELOC ). If you have available equity in a property a HELOC on the property can serve you well. Second, it meets the lenders guidelines for proof of funds letter even if this is not the money you intend on closing with.

The bottom line is unless you’ve got an established relationship with the bank it’s likely you will have to show proof of funds in some manner. If you are new with a small amount in resources, find a trusted hard funds provider to work with and they can supply the proof of funds letter you want.

If you want to find out more on a way to close deals with private transaction funding , in addition to getting the necessary proof of funds letter, without any of your own money or credit please visit www.weprovidethefunds.com
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Posted on Monday, June 29th, 2009 at 11:36 pm in Uncategorized | rss feed for comments| Leave a response, or trackback