Need Short Sale Advice

[gulfer]

Price is usually the price Ryan. A couple of good places to look for Bank Owned is HUDHOMESTORE.COM or HOMEPATH.COM. You can see the properties that are available. But the very best part, these homes are part of government program a Neighborhood Stabilization Program (NSP) that allows home owners, not for profits, and other government entities a period (1-15 days) to bid for one of these without investor involvement.

It can be competitive though. I have lost out two bids already for people.

Short Sale can be okay though. As mentioned, each one is different. But they are getting faster. Still some deals there too! If you have alittle time to wait things out, could be worth it in the end.

[NYPhinfan13]

Originally Posted by gulfer

I guess that surprises me a little. Bank of America has been advertising that they will get you an answer now within 20 days.

But each Short Sale is different. I went to a conference where attorney's were talking Short Sales. The point from the lawyer was that usually in short sales, the owner is working with the lender. There are times when there is a 2nd mortgage on the lender, liens on the properties, etc... All those have to be agreed to before the Short Sale can be 'approved'. The easiest ones to get done are 1 mortgage and not a significant amount under water. Take a small loss for the bank and get that property back on the market.

Scenario:
I bought in 2006 for 200,000, mortgage from BoA. Today's value of home is 90,000
I have my original mortgage for 200,000 with BoA. But I was greedy! In late 2006 I took out a 2nd mortgage from Bank of Anyone. I took a few vacations, put in a pool, etc... for 45,000. I also have an HOA lien on my property because I have been running a business out of my home, which is against the rules, and they have fined me total of 20,000 over the last 6 years.

Now my total obligation for the property is 265,000. As of May 2012 I still owe 235,000 on a property worth 90,000. I can pay my mortgage, but I don't want to because it is not worth my investmet.

(Take all your personal beliefs, responsibilities, ethics, morals, etc.. out of this equation - EVERY PERSON IS DIFFERENT)

So I tell a Realtor I want to sell it. The Realtor looks at comparibles and gives me the 90,000 price. I list it for that as a Short Sale. I get someone two days later that wants to buy it. My Realtor submits the Short Sale Package right away and we wait to hear from the Bank or whoever services the mortgage. The Lawyers and Banks are talking, they are talking to the Bank of Anyone (2nd lien holder), and my HOA. My HOA knows that home is only worth 90,000. Since the HOA is so low in the order of getting paid, they say NO DEAL to the short sale. It is principal because of all the hassle and trouble I have given. Then 2nd lien holder also knows they will not get paid. Bank of America knows that if they give up XX dollars of what they are obligated to get on the 1st mortgage, they won't get anything.

Now it is 6 months later and it comes back as a NO DEAL. Home goes to Foreclosure, which you will probably see for sale in 6 months to a year, and the original owner files bankruptsy and is now renting a house better than he was living in before for the same amount of money.

This house hasn't been lived in at least a year, probably longer. I would think by now, the owner is not paying a mortgage. I looked on the county clerk website; there is a lien from the HOA. Two loans that seem to be from BOA. Also a les pendes from BOA against the previous owners. Seems strange to me that a house that was listed last November for 239K is now 277K. My realtor said that the latest price wasn't negotiable, even though someone made an offer back then and they went into contract.

[gulfer]

The price increase surprises me as well if they in fact did approve the price. My thought is that BoA got an agreement from the Mortgage Holder last time for the 239K. That paper could have been sold yet again, now this new holder of the paper says 277K. Just a guess.

That is what makes me so frustrated with these. You need an attorney to actually get you the answer. If all this financial crap wasn't make to look so devious, put it out in the open and see where it went! If that was the case, maybe the owner could make a deal directly with the investor and we wouldn't have such a back log on all of these.