Posted by Ben (OH) on February 03, 2003 at 12:34:15:
Yes. I agree. Usually it indicates seller to get no money except in FHA deals where the seller can get up to $1000 moving expenses.
So, what is a “short sale”? - Posted by Pablo
Posted by Pablo on January 31, 2003 at 13:13:20:
I keep reading that term on this site, but, searching the archives, I find lots of discussion about it, but no straighforward definition. Help a newbie here, will ya?
Thanks.
Pablo
A Short Sale Is… - Posted by Sean
Posted by Sean on January 31, 2003 at 13:21:10:
…where the lender agrees to take less than the full amount owed for the mortgage.
Imagine a guy bought a house for $100,000 and it’s now worth $80,000. He still owes $85,000. You can apply to the lender for it to take less than the full amount. It helps for the guy to be behind on his payments.
Re: So, what is a “short sale”? - Posted by jerry-IL
Posted by jerry-IL on January 31, 2003 at 13:19:32:
First suggestion, check the archives.
A short sale is a discount of the balance owed on a mortgage. When the lender believes that the chances of collecting on the loan in the originally-agreed-upon manner are low, that lender may discount the balance to cut their losses and avoid the long and costly process of foreclosure in court, reselling through a realtor, etc. There is usually a formal procedure and paperwork.
Re: Can you flip it? - Posted by Rob FL
Posted by Rob FL on February 01, 2003 at 14:01:36:
Yes, it’s best to flip it with a double closing though. Otherwise the short selling lender might get upset and nix things when they see the settlement statement showing an assignment fee. I’m speaking from experience here.
Re: Can you flip it? - Posted by Ben (OH)
Posted by Ben (OH) on February 01, 2003 at 15:21:34:
Have you ever had an addendum that states the seller shall deliver all excess funds on closing to ROB FL?
Works for me.
Re: Can you flip it? - Posted by Rob FL
Posted by Rob FL on February 01, 2003 at 19:31:41:
On a short sale there are no excess funds for the seller. Except for HUD which allows $1000 for moving expenses on FHA short sales, I’ve never known a lender to approve a short sale where the seller gets any proceeds from the sale.
Wouldn’t it be kind of stupid for the lender to take a hit on their mortgage while at the same time letting the deadbeat seller walk away with money at closing ??? Maybe I am missing something.
Every short sale I’ve ever done, the lender either verbally or in writing said that they won’t approve the sale until they give written approval of the final settlement statement. And believe me, they pick that thing over with a fine-toothed comb.
Re: Can you flip it? - Posted by Ben (Oh)
Posted by Ben (Oh) on February 02, 2003 at 06:21:54:
It an assignment of contract from my seller to my buyer. Lender on the short side is at $50K. I am at $65K on my buyers side. Buyers HUD shows a disbursement of $15K to seller. Seperate addendum for title company signed by seller states “all excess funds to go to me”. Short Seller never sees this HUD.
Re: Can you flip it? - Posted by Rob FL
Posted by Rob FL on February 02, 2003 at 17:57:27:
If there is an addendum to the settlement statement that is NOT being disclosed to the short selling lender, and the short selling lender’s written short sale instructions asks to see the entire true closing statement, then there may be some fraud going on here at least on the part of the closing agent. I would tread very carefully if I were you. Any fraud or intentional deception against the lender could come back and haunt you both civilly and criminally.
What you are talking about might be classified under what journalists call an “illegal land flip.”
Re: Can you flip it? - Posted by Martha-FL
Posted by Martha-FL on February 02, 2003 at 10:37:03:
Ben,
I want to make sure I am following what you wrote. You short saled the property at $50k and you have a buyer paying $65k (is this buyer an investor?) and through your assignment of contract you are getting a $15k assignment fee. Where does the title company addendum come in?
I am still trying to get a grasp on this. Thanks for any info you can give me!
Martha
Re: Can you flip it? - Posted by Ben (Oh)
Posted by Ben (Oh) on February 03, 2003 at 06:37:59:
The short sale lender has no business on my buyers side of the HUD. It’s a seperate agreement. Why would there be dulicity? If the lender agrees to to the payoff and I assign the contract for a few dollars more then are you saying assignments of contracts are flawed? The short sellers BPO/Appraisal determined the sale price of the property. If our guys go in the property after the appraisal and we clean/paint/beautify then ourwe not entitled to our margin? After all we created the dormant equity–even if it took a week or a minute, no?
In the short pay sale or any transaction you get 5 appraiser and you will get 5 different prices. If I am able to make the spread what is the crime here? Full disclosure. The short pay lender is not entitled to see my buyers docs, even if they did I still don’t see a problem.
Re: Can you flip it? - Posted by Rob FL
Posted by Rob FL on February 03, 2003 at 08:17:11:
The only problem would be if there is an intentional violation of the written short sale instructions.