I'm back-update-starting short sale on empty 2002 house
I've read the articles on short sales. I will be buying the 'short sale kit' but need to do deals first..tapped out.
Re. present value of house, built in 2002, approximately $150K, two loans= $154K.
I've double checked this next info...
1st mortgage-Chase Manhattan $31K. 2nd mortgage USDA $124K (Rural Housing service or FmHA)
Owner has walked away from house, no job, no income, in drug rehab, wife and baby have left him, parents can no longer help, and now there is DSHS lein against the property (child support). Information through title search.
Today I'm signing a 'Contract for Sale and Purchase' with the owner. He has signed a 'Authorization Release of Information' and has written a 'Hardship letter' for me to send to lenders.
I need help on the net sheet or closing statement as stated in Dwan's faq sheet on short sales. Short from buying the kit from the 'The Creative Investor" people could someone show me how to do this bit of homework for me before I go before the lender's mitigation rep?
I am offering, total, $90K for the property, Which is $150K, then I'll break it down from there with individual lender. There isn't any major repairs or costs, remember its a year old and ready to move in.
skwe-g
Ok
I have a signed 'Authorization to release Information' and a 'hardship letter' and a signed offer with the owner. I'm almost ready to talk to the banks.
I really would appreciate a pro's impute on how to do a net sheet. Are there any takers out there?
Just wondering how u found this house?....C
How do you have offer with the owner when you haven't negotiated with the lender on the short sale yet. I am assuming that the owner has no equity since you are doing a short sale. The mortgage company WILL NOT want to see the seller get any money from the deal.
Before the mortgagee will consider an application for short sale relief, there must be an executed contract for sale between the mortgagor and purchaser.
There is no material negotiating with the mortgagee at this point...
If this were a 'deal' that I was asked to evaluate, I recommend that the Purchaser pass on this. IMHO, it simply doesn't seem worthy of a short sale.
What does the contract look like? What do you put as the purchase price? Can you send me a sample? My email address is awright707@aol.com. Just seems like you are putting the cart before the horse when you have no idea what the lender is going to settle for.
To Cairns-I found this house by the owner calling me from one of my 'I buy houses' ads. Originally I was going to do a lease purchase, but the title search came back with a DSHS Lien. I was about to walk away because this lien blew my numbers out of the water when I remembered an article in A.D. Kessler's magazine about short sales which led me to this web site.
I'm not sure what IMHO means, but I've been reading the FAQ about short sales and so far I've followed to the letter on what to do. This house has no equity and the loan are more than the value of the house. If 'shortsalepro' would pass on this deal, I need to know exactly why. What am I missing or what detail should I know that I don't know about?
skwe-g
I would pass on this scenario because something doesn't make sense. Before I dedicate time and resources (or a Client's resources) it has to make sense.
Having a huge, government insured 2nd mortgage loan behind a modest, conventional first mortgage loan doesn't make sense to me. There is a piece to this puzzle that's missing.
Firstly, the existing first mortgagee will have ZERO incentive to discount since their's is a 25% LTV. Unless, of course, there are some biohazards burried on the property. But that would bear on the indicated FMV (stated as $150,000). If the FMV is accurate, and the stated mortgage liens are accurate, this is a problematic deal. I've worked with the USDA (if memory serves this was the government agency involved). They are all about 'their program' and if they have to take back a property and recycle it into their program, they will be inclined to do so.
Is this deal (as presented) impossible? I don't know. But frankly, In My Humble Opinion (IMHO) it isn't worth the time or effort to find out. I would walk and devote my time, energy, and resources to a more suitable short sale candidate.