EEEK!! Short Sale Delemna
Am I the only per son out there that finds FHA Short Sales to be easier to negotiate than conventional mortgages? Here's my problem:
One of my investor clients asked me to help him acquire a property with the first held by WAMU. His RE Agent was unable to even get a payoff
statementt IN 3 MONTHS!!! The home is now sceduled for the 3/2/04 Trustee sale. We aren't even trying to short the 1st mortgage.
Now, a $29,000 2nd is held by CitiFinancial Mortgage. My investor tendered a short sale offer of $4,000 in November which was accepted but rescinded by tthe lender citing a better offer of$20,000 - yeah right!
That deal didn't go through ( suspicious) so I have resubmitted the origianl offer of $4,000 and willing to go $5,000 if they counter.
IIs there any reason for them not to accept this offer at this late stage of the foreclosure process? Is it fathomable that they would take a total loss when the first forecloses? Are they just playing hard to get?
Help me out here gang.
C-
<IMG SRC="images/forum/smilies/icon_eek.gif"> [ Edited by cpifer on Date 02/18/2004 ]
As we know, shorts are predicated upon the subject property's as-is, fair market value...the mortgagee's perception of value... and what they perceive to be in their best, financial interest.
Perhaps their due diligence indicated that they could recover about $20,000 if they protected their interest by joining the Plaintiff in foreclosure, or bidding at sale up to their level of exposure.
Perhaps they did get a better offer.
Thanks Pro -
I woulda never thunk of that. As a matter of fact, it's hard for me to visualize that two mortgage companies could team up when most big lenders don't communicate at the interdepartmental level.
Well, that's just a big poop. Is it that common a practice for lenders to team up like that? Thanks,
C-
When a senior lien initiates foreclosure, they almost always (may differ from state to state) notify anyone with a recorded interest in the property.
So, yes, there is communication between mortgagees on some levels with regard to the mortgaged property.
Loss Mit is a relatively small community within the mortgage loan servicing industry. They share info.....
I was under the impression that if you received an acceptance letter by a lender than they had to stick to the terms of that letter. Did the investor have the accepted 4K in writing?
Hello kevkarb;
I doubt that the investor had anything in writing but I'm used to 2nd mortgagees saying something like: "When are you sending the money" or "when are you closing" or something like that. I'm always prepaered for some kind of counter as I am in this case. This is just the first time I had to gather up a whole short sale package for a 2nd. Maybe I'm spoiled.
C-
I hate dealing with these guys here on short sales. If you can get one supposedly you will not have any problems in the future. But I have been unsuccessful.
The 2nd lein holder probably made a deal with the 1st. I sit the court house steps (early) and watch this all the time with the banks. they protect thier interests by working together. The 2nd will sell the 1st thiers or make a deal to buy the 1st minutes before the sale. Then one holds the property and with the good weather we are having will post the house for sale at full market and have lots of neogiating room with a buyer.
Or they will post it with an auction house that will get 5% on the sale and they will market the house and sell it at auction somewhere between the "foreclosed cost" and the market plus their 5%.
I have worked on some properties from the short sale carrot to the after court house steps sell to the final auction.
the Auction house is 85% successful for the bank. but I learned alot being drawn along in their little games. (I've done 4 houses this way - unsucceefully so. I even have one that I still put bids in on even though it went through forecloseure, courthouse sale, realtor and auction then after auction sale of unsold properties and is still empty. Citibank is still holding hopeing for the $40K profit from thier investment. [ Edited by Dreamin on Date 02/19/2004 ]
Thanks for sharing your experiences... which confirm that real estate markets are unique, and dynamic.
I'm sure that you'll find a blended technique that works for you.