Possible Short Sale Pre-foreclosure, Need Help!
I need some help structring this deal...I don't know if it will work, but it's a friend and I'd like to help if I can. She's out of town and apparently they've locked up the place. They're threatening to move everything out. Can they do this pre-foreclosure?
I'm working on getting the authorization to release but, in the meantime, here is what I have:
Condo 2/2 built 1987 ARV: $95?? Bought for $82,500 in 2001. I've tried doing home value searches but cannot come up with any comps. Best I can get is a rental comp at $500/month. The condo is in good condition, I don't think any repairs will be needed.
$75,000 1st mortgage, variable interest, at note inception, 7.5%; don't know current rate
$18,000 2nd @8%
Buyer is 4 months behind, arrears about 3-4K.
If I could get a short sale on the 2nd...realistically, how much would I be looking at?
Based on the local newpaper, I think this might appraise low. If I get a low appraisal from the lender this may open up the possibility of a short sale with the 1st as well.
I know the numbers are a bit sketchy, but any help is appreciated.
Also, she is 68 years old. Any advise on a reverse mortgage? I don'treally know what that is...would it be feasible in this situation?
My experience is that the first mortgage lender will sometimes participate in the losses as well as the second mortgage lender. Remember the lender on the first mortgage will probably take a hit in foreclosure as well. He must vacate the property, maintain the property and pay a realtor, plus perhaps closing costs and taxes. Be bold and attempt to reduce both mortgages. By reducing the first, your can have more room for negotiation with the second. Good luck!
Dan Thomason
_________________
[ Edited by joel on Date 06/20/2004 ]