Short Sale Help - Posted by JoeA

Posted by Brian_wa on March 22, 2007 at 17:12:55:

How much can you realistically sell it for in a short time frame? What’s the payment? Would your friend be willing to sell it to someone and be willing take a hit on the negative mortgage for about 6 months? Couldn’t you help him with the marketing to find a L/O buyer? What about turning the house into a roomming house?

How about speaking with another CW rep and don’t mention the existence of the 2nd? How about calling the 2nd and see if they would release the lien at a great discount? if they’re willing to release for 5k, wouldn’t that help your friend tremendously with the monthly payments?

700 credit score is a valuable asset. Don’t ruin it without a fight.


Short Sale Help - Posted by JoeA

Posted by JoeA on March 22, 2007 at 13:20:40:

there’s a home heading to foreclosure that i want to purchase via a short sale. there are 2 mortgages on it (CountryWide and GMAC).

the home has been on the block for a few months with no offers and it’s vacant. the seller (an investor himself) is desperate to let it go at what’s owed, but this market (South Florida) is totally flat. he can’t even sell it below what is owed.

the home appraises for $580k and he owes $494k (both payoffs). so he contacted me to see if i could work out a short sale with the lenders and buy it at a really low ball price.

i contact CW and at first i thought we hit a deal, until i told them that there was a 2nd lien on the home with GMAC. she, the CW rep, told me that they will not short any mortgage on a home if there is an existing 2nd lien on the property. i’m no short sale expert, but i couldn’t figure out what GMAC has to do with her shorting the 1st??

she said that the 2nd lien holder would have to remove the lien or it must be satisfied somehow before CW would entertain a short sale. this made it seem to me that even contacting GMAC to short the 2nd was not going to work, because CW is saying that the 2nd lien holder most be OUT of the picture. period.

can anyone shed some light on this? what does the 2nd lien holder have to do with the balance owed on the first? i thought that by shorting the 1st, it would make the “overall” payoffs less - thus making the deal attractive.

anyone have a suggestion?

Re: Short Sale Help - Posted by Ed in Idaho

Posted by Ed in Idaho on March 23, 2007 at 01:12:58:

Any possibility of going the auction route on this since everything is current. I was talking to a guy who did one here(ID) and he said most of his work was actually in FL and that he does very well with this method. I can’t remember the company but I have his card somewhere and if you want it e-mail me. Or if you think you want to go this way maybe someone here has that experience to help you with.

Re: Short Sale Help - Posted by lukeNC

Posted by lukeNC on March 22, 2007 at 13:52:09:

if thats the case, then the deal is dead.

Just no way around it, UNLESS you are willing to pay off the 2nd, possibly at a HUGE discount, and then deal with countrywide.

Re: Short Sale Help - Posted by JoeA

Posted by JoeA on March 22, 2007 at 13:54:32:

agreed… it’s a shame. i don’t get what one has to do with the other? they BOTH stand to lose if the home isn’t sold. why the barriers?

Re: Short Sale Help - Posted by lukeNC

Posted by lukeNC on March 22, 2007 at 16:29:40:

FMV = $580k, payoff is $494k, what are the payoffs on both?

Maybe GMAC will do a release of lien?

Re: Short Sale Help - Posted by lukeNC

Posted by lukeNC on March 22, 2007 at 14:05:31:

the 1st doesnt want to take a loss if a junior lien gets paid. It just doesnt sit right with them. And, it depends on the lender and the loan involved.

Its just one of those things where it wont work.

One more thing, is the loan actually in foreclosure proceedings or is it about to go into foreclosure? Sometimes that matters. Sometimes it may be in default but not actually on its way to foreclosure just yet. Once it gets into foreclosure, a different dept may deal with it and be more flexible.

Ya never know.

Re: Short Sale Help - Posted by JoeA

Posted by JoeA on March 22, 2007 at 14:14:27:

Thanx for the help and input…

The mortgages are actually “current”, but the investor simply cannot make payments on it any longer. It’s a shame, because the investor has a +700 score and this will be huge black eye on credit.

The investor has tried all angles: lease option, land contract, owner financing, you name it - it’s been offered. I think the main problem is that it’s a price point that’s too high for some that are first time home buyers, and it’s too low for executive type buyers. It’s kind of in the middle and probably was a poor choice of home investing.

Starting this month (April), the investor tells me he will not make anymore payments, as it’s bleeding his household finances. We both spoke with CW, and like I said before, they won’t budge until GMAC is gone. Unfortunately, the balance on the second is $97k - too high for any short that makes sense.

He’s stuck. I just wanted to help him because I know him personally.