Multi Mortgages On A Short Sale
We have a Short Sale on our hands...the only issue is that we have mutliple mortgages and loans to short. The line looks like so:
1st Mortgage:
$32,000+$7,000 in arears= $39,000
2nd Mortgage:
$6,000+$3,000 in arears= $9,000
Homeowners Assoc:
$2,000+$3,000 in arears= $5,000
2nd Homeowners Assoc:
$1,000+$3,000= $4,000
We were thinking about offering the following for each in the same order:
$20,000
$2,500
$2,000
$1,000
Are these offers reasonable? Will the Homeowners asscociation be as willing to take a discount like the Lender will.
Our owner will be filing for bankruptcy within the month if it doesn't go.
The comparables are around $35,000-$40,000
Any advice or insight would be greatly appreciated. Even examples of those who have had similar situations.
Your numbers for the first might be close if there are NO repairs. Make sure you know your holding cost. Your numbers for the 2nd and 3rd I would think are a bit to generous. Start them at 10% of the total. Remember if the foreclosure goes all the way...2 and 3 get nothing.
Best of luck!!
What would be the motivation for the first to accept less? I don't see them moving too much, but it depends upon the confirmed value and estimates for repairs. Is the first an FHA insured loan? If so, that will set the scene for how you must proceed.
Don't expect the HOA to budge, either.
dlynn,
can you be more speicific in terms of "holding costs" and how one would formulate those?
(from Fletch's partner)
Actually, the first HOA is $10k at this point and the 2nd HOA is over $5k. The 2nd had agreed earlier to accept $4k in a previous short sale attempt by the condo owner's father. We have yet to talk to the 1st HOA.
I don't expect the HOAs to move much either way, as I don't believe they need to. They are senior liens to the first mortgage, correct?
The second realizes she will get little or nothing (we offered her $1000).
I spoke with the bank today, they want a proposed HUD-1. How can I appropriately do this without paying a title company to run the title search to get accurate figures? Is****Must Reach Senior Investor status before posting URL's*** the best way to go about filling in the form?
Sorry about the shotgun approach questions. Any knowledge you experienced folks can give is greatly appreciated. Thanks!
Nick
There is a website that charges $20 for one HUD -1 form, or $20 month for unlimited. You fill in a few blanks and the program does the rest.
****Must Reach Senior Investor status before posting URL's***
or email me. Ju
As to your question about Holding Costs. I only mentioned it because sometimes as we look at overall cost of a property we forget to include them. Of course we will only make the mistake once.
Depending on what you plan on doing with the property, Sell, Hold, Flip and so on, holding costs can be a major factor in calculating if you have a good workable deal.
Items like Payments, Taxes, Water, Power, HOA fees, Insurance, Maintenance, Selling costs, Closing costs and what ever else may pop up.