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.
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.