SHORTSALES - Anyone know if the sellers list an IRA or retirement on their financials

[Pat Deptuch]

if the bank will lay claim or are those protected and excluded?

I have a call into an attorney to ask in the State of Washington but if someone knows the answer I'd appreciate hearing it and will share what I hear back.

[Jeffrey Bastress]

They will want to see all assets including retirement funds. However, the lender can not make claim or attach any assets of the seller with out the sellers permission. The lender can only accept the short sale with conditions such as the seller needs to kick in $x amount at the closing also, based on what the lender feels the seller can afford to do based on their financial information, including ira's, 401k's etc. It is then up to the seller if they want to accept the terms of the short sale, which may require for them to liquidate their retirement funds, or whether to not accept the short sale terms and keep the home....which normally means foreclosure is impending.
Keep in mind that when they applied for the mortgage, they listed all their retirement funds as assets as their financial snapshot in time, but nothing but the property was pledged as security for the mortgage loan.
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Jeffrey Bastress
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[Pat Deptuch]

Thanks Jeff:

Way back, I'd heard that the banks could not touch the seller's retirement or IRA money so sounds like you are saying that the bank can ask or make a demand that the seller pay $XXX to have them approve the shortsale ( as they normally do anyway on most of them) but in this case since they see it might be a sizeable sum in an IRA account - they very well might insist on it. So far with all the shortsales I've done (about 40) we've just said no, the seller can't pay you anything and they signed off. This is my first one where the question of IRA money came up. Anyone else run into IRA or retirement money that the sellers had and did they have to give any of it up?