After Short Sale Accepted
Hello...
I am fairly new to the short sale procedure. I will be making an offer on a first mortgage and understand I will need to pay cash, etc. if it is accepted.
My question is what occurs after I pay for the assignment of the mortgage? Do I physically register this somewhere? And how do I complete the sale if I hold the mortgage? Do the homeowners have to realize that I am being paid instead??? Any help would be appreciated. Thanks!
Most shorts don't involved the purchase of a mortgage (paper)... but the purchase of the property, itself.
As mortgagee, you won't own the property, but an instrument of debt with the property as collateral.
Yes, once you pay for the mortgage via an assignment (hopefully you'll have done a title search), you'll be given an instrument of assignment which you'll need to record ASAP. You should also be handed back the original mortgage.
Once you are the mortgagee... you should so advise the Homeowner and direct that payments be made to you.
If they fail to pay you, you'll have to foreclose the mortgage and force the sale or mortgage refinance of the property.
Make sure you run all this past an attorney.
Thanks for the information...for clarification you are saying that I can opt just to purchase the property rather than receive and assignment???
That depends upon your own investment objective..
Frankly, owning and servicing a mortgage is a long term investment.
If it is your objective to own the property... you have chosen an atypical route.
Are you prepared, as mortgagee, both financially and emotionally, to foreclose?
My objective with this particular property is to get a reduction on the first and purchase the home from the owner, rehab and sell.
What are my options to attain that goal?
Thanks again.
Is the first delinquent, in default, or in foreclosure? Are the mortgagors in bankruptcy?
Is the property for sale?
Have you discussed your intent with the Homeowners?
How much is owed on the first? What's the house worth in it's as-is condition?
The payments are delinquent currently...foreclosure has begun and judgement against the first is approaching. There is only one mortgage. The homeowner is not in bankruptcy. She owes about 22k on the property. Fixed up, worth about 55k. There is some rehab work needed warranting the short sale. Yes, the homeowners are aware that my intent is to purchase the property if possible and they are looking to sell. Any suggestions??? Thanks!
How much is owed on the first mortgage including any unpaid property taxes? Any liens or judgments against the Seller or the property?
There are no unpaid liens on the property...the 22 includes taxes, etc. Thanks.
Sorry, if you previously stated the amont due.
What is missing is the as-is FMV. Unless it's pretty low, I don't see much of a short sale potential.
The fair market value in its current condition is lower than what is owed based on some comps that I ran.
I do believe after speaking with loss mitigation that they will review an offer.
I guess my problem is that I am not able to wrap my hands around the whole basic concept. So, if I get them to accept a lower offer...what are the steps to take after that? I know to run title. I know to get gap insurance...but can acutal property be bought through them with cooperation of the sellers or do I have to hold the mortgage???
Thanks again...sorry for my lack of the nuts and bolts
You are stating that the property is worth less than $22,000?
How much $$$ will it take to transform this into a $55,000 FMV?
Feel free to PM me, or check out my banner ad, "Let's Git 'er Done!"
Yes, right now I believe it to be worth less than 22k. The big detriment I see is that it still has oil heat and no forced air. Do you stay away from properties with this?
The big plus that I have is that my partner is capable of doing all repairs. Therefore, the only out of pocket expense is the materials. It may cost 10k to get it up to speed...but the age of the home (1899) and possible presence of asbestos is causing me to shy away slightly.
Let's say that I approach loss mitigation with an offer of 15k for example sake. They say, ok. I have to pay them cash for it and then I have to hold the mortgage? Or, can they reduce the amount owed and I can make an offer to the homeowner that way?
One other issue I am now having...her husband who passed away is named as John Doe on the foreclosure paperwork. Something a death certificate at the courthouse will cure quickly?
Thank you for your help...my newness is showing again...what does PM mean???
I appreciate it.
PM means "private message"
If you can factually support an offer of $15,000... that's the way to go.
Once your Offe is accepted by the Seller and the mortgagee agrees to accept $15K as payment in full... you'll have a traditional closing with passing of title...the mortgage will be marked 'paid' and you will own the house.
The key is to convince the mortgagee to accept less than they are due.