Bankruptcy And Shorting??
hi all, i have a buy-out at 143,000 with 14,000 in arrears--property comps at 169,000...he is in bankruptcy including the house and is moving from a chptr 13 to a 7..we feel he may be upside-down on the property as-is..can i pull the house out of bankruptcy and still propose a short sale with-out the house being expedited back into fcl from the lender..can i also pull the house out of bankruptcy with out a negotiated price as my startegy is to short...i hope this makes some sort of sense to you all..any isight would be great..thanks
regards-pat
I am in the simular situation with a chapter 13 in foreclosure, will the bankrupcy court allow you to make a deal with the bank to buy the house, or do you have to wait until the foreclosure is over?
Any help on this i'm sure both of us would appreciate.. Thanks .
thanks tdelo--could anyone give any insight to this situation for the both of us...time is running out for me and the bank is stone-walling...the attny wont say anything and my own attny seems hesitant..im not asking for any legal advice, just want to know if it has been done and any expertise...thanks, and good luck to all...
regards-pat
I have done this kind of deal twice, and let me tell you it's a headache. In one situation I was trying flip the house 92,000 and wanted to short the mortgage. The mortgage company was countrywide they allowed me to give estimates and submit and offer of 70,000 while the couple was in bankruptcy but before any sale could commence they had to discharge the chap. 13 Aslo it was a FHA You should ask the home owner why filed for bankruptcy. The answer depends on how you shall proceed to excute. In my scenario they just wanted to get out of the house. I ended up having to go through a realtor and assigned my contract to another buyer for 15,000 dollars. This satisfied the mortgage company that the price they were getting was fair. P.S. If the mortgage company elects that you put the house on the market you better pick the realtor and supervise the transaction.
Take advantage of the bk situation. Alot of lenders really dont like to have properties tied up in bk so this is just another negotiating tool. The house can be lifted out of the bk and you CAN do a s/s on it. Many times the property wil be with the bk department instead of loss mitigation so if you call loss mit, they will tell you the file is sitting with the bk dept. its ok, and just stick with it. you can still submit a s/s though the lender will want you to pull the property out of bk before they can do anything formal with you.
remember in a chap 7 the lender will move to do a lift stay on the property anyway to foreclose and most times if their is equity, the lender will be successful.
I had a similar situation awhile back. In my case I was able to get the assistance of the bankrupcy attorney who was getting permission from the judge to keep the bankruptcy in tact. Here in CA there needs to be notices posted in advance of a foreclosure which gives some extra time. My problem was the timing of the financing. I eventually worked a deal with the foreclosing lender where I had money at risk that would paydown the lender if I closed in 30 days. Otherwise the money ($15,000) was lost. We closed on the 29th day!
Good luck with these!
-Ed