Personal information given for Short Sale

I

irvinefan

Member
Hi all,

A friend of mine is submitting an offer on a short sale and is being asked to supply her social security number  in addition to bank statements (proof of payment), etc.  It makes sense that buyers would need to provide proof that they can pay the down payment/closing costs, etc., but is a social security number required as well?  I had not heard this before.
 
irvinefan said:
Hi all,

A friend of mine is submitting an offer on a short sale and is being asked to supply her social security number  in addition to bank statements (proof of payment), etc.  It makes sense that buyers would need to provide proof that they can pay the down payment/closing costs, etc., but is a social security number required as well?  I had not heard this before.
Click to expand...
My buyers had to do the same thing on a few short sales, including with Bank of America.  Besides the social security number, they also required their date of birth, and contact information.  Standard protocol with many lenders on short sales.
 
A SSI number will allow the company to pull a credit report and or title information. That data might show similar addresses to the seller, or perhaps maiden names linked to the seller. They do this to find out if there is collusion going on between parties in order to short the bank in a manner not encouraged by the rules of the game.
 
i guess that makes sense even though it sounds invasive. 

i appreciate the response guys.

just wondering... do you ever hear of anyone taking the information and engaging in any fraud/identity theft? 
 
irvinefan said:
i guess that makes sense even though it sounds invasive. 

i appreciate the response guys.

just wondering... do you ever hear of anyone taking the information and engaging in any fraud/identity theft? 
Click to expand...
Nope and if they did then there would be serious hell to pay (literally) on the bank's side.
 
irvinefan said:
Hi all,

A friend of mine is submitting an offer on a short sale and is being asked to supply her social security number  in addition to bank statements (proof of payment), etc.  It makes sense that buyers would need to provide proof that they can pay the down payment/closing costs, etc., but is a social security number required as well?  I had not heard this before.
Click to expand...

Working on the listing side of the short sales, I can confirm that this is required of many/most lenders for the reasons mentioned above.  Lenders need to verify that the buyer is at least not directly related to the sellers.  Otherwise, they would run the slippery slope of having more people that are underwater selling at up to 10% less than appraised value to their family members, and keeping occupancy unchanged. Also known as credit fraud. 

As a listing agent I must submit a full package to the bank (complete all of my tasks) before a negotiator for the bank is assigned.  Seller has a litany of paperwork to submit, as well, to prove eligibility for a short sale.  Both BofA and Wells Fargo have made the process far more automated as of April 2010, with dedicated websites for input, tracking, and support.

As a buyer's agent everything is hurry to submit everything up front, wait, wait, wait, hurry for re-proving approval, wait, wait, wait, hurry for inspection/disclosure/close.

edit to add:

For clarification, "re-proving approval" is necessary because in many instances, the time it takes to have the short sale approved by the bank has given the buyers' assets time to shift.  Maybe they had $200K in the market 2 months ago that had dropped to $150K and would no longer qualify for the purchase.
 
An example of an approval letter just received today, with seller/buyer info deleted for obvious reasons.
This is BofA's current tack.
Note the wording that is used in the first few paragraphs, and the implications if fraud is detected.

ssapproval.JPG


I hope you find this useful info,
-IrvineRealtor
 
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