It is doubtful that any lender would accept a short sale on a mtg that is current and performing. The ingredients that usually entice a lender into accepting a short sale is the mtg being in default, and probably heading to the foreclosure sale… Absent that, I can’t imagine a Lender saying yes to your proposal.
Exceptions might be a private lender… or other extenuating circumstances. Try to put yourself in the shoes of the lender… for a moment. Payments are being made timely, you loaned the funds 6 months ago, and now you get a proposal for a payoff of the loan, being less than what you loaned to the borrower. Keep in mind at this point with payments being current, you have NO reason to believe that the borrower is going to default. What would you say as the lender…?
Carpenters possessing a hammer often try to treat everything as a “nail”. RE Investors can fall into the same pattern… It is important to note that as an investor, you have many more tools than one, and in this case, the tool is likely NOT the short sale.
Posted by Lynn (FL) on October 31, 2006 at 09:33:23:
I have an opportunity to purchase a SFH for the loan balance. As far as I know, the payments are current. It is about 6-months into a 20-year note. Would I have any success contacting the mortgage company and asking for a discount? Should my contact be in person (via telephone) or with a letter? Has anyone had any success doing this?
Posted by Redline on November 02, 2006 at 01:05:50:
As JT said below, for a mortage company to consider a discount they must see a downside. If the note is current, why would they do this?
Just for the record … I’ve done short sales where I stepped into the picture while the property was still current. I called the bank and told them what was happening and payments would stop. They said “Call us back in 4 months”. I did and we made the deal then. Somebody called somebody’s bluff there lol …
I would suggest making the contract say if the value is not there or the loan is not current you can re-record in their name. Check the value, if it has gone down and it may for the next 18 months, figure how long it will take to recover at an appreciation rate of 2%/year. Ask for more concessions if possible. Investigate, then jump in if satisfied.
Bill