Release letter to request bank payoff

[Juan Carlos Cabrera]

I’m working to buy a house from a distressed homeowner, help her avoid foreclosure. This will require me to deal directly with mortgage lender. Is there a release form I can use so homeowner authorizes me to talk to the bank?

[Evan Wiesner]

@Juan Carlos Cabrera I'm assuming you're doing this in Texas, which is one of the easier states to do it. Put the house in contract and open escrow. My suggestion is to do it with a realtor experienced in short sales. Remember, the lender isn't legally allowed to talk to you about someone else's loan without a release, which they will probably want to provide for security anyway. Still, they almost never will negotiate with you directly as the current legal environment would leave them open to a predatory issue potentially.

Once you have escrow open then the process becomes easier. It's much more straightforward for the bank, and it will put the payoff in writing. If the payoff truly is a short sale than the seller needs to start that process.

FYI - if they haven't already started the process for a short sale then most banks will require the property to be listed on MLS for a period of time to ensure they are getting the best offer.... again, make sure you have a realtor involved.

If they have already started the process, then you should just need to get it in escrow and in reality, most of it will work itself out through the process. Just stay on top of the filings for the house because your foreclosure process is like a rocket compared to most states.