Predatory Lending And SS
I spoke with a HO today and they are upside down on mortgage. Purchased a new home in 2006 at 372K, cannot afford the payments anymore. They have spoken to the bank and they state that they are willing to SS. Builder has dropped prices on new homes in this area by 10K, so the FMV is about $370. There are 4 other homes in the area going to FC next week. They are not in default yet but have been in contact with the bank. (They have had money gifted to them for the past few months to make their payments) House has been on the market for over 1 year with a total of 2 showings. In their attempt to find new housing, bank says they do not even know how they received financing to begin with as they show they could only qualify for 65% of this mortgage. .They are meeting with an attorney to discuss class action suit of predatory lending.
HO is adamant that the SS pkg paperwork that was sent to them states only they can communicate with Loss Mit department and they will only accept a 75% SS offer.
What would your recommendations be on taking this as a SS with the history of all these FC in the area?
Why would a first ever offer money to a junior lien holder? Usually it is the other way around. The junior brings the first out of default by paying money and then files a notice of default in the amount paid to the first to bring the first current(assuming nothing more is owed to the junior).[ Edited by edmeyer on Date 08/02/2007 ]
Clarification: The first will only proceed with the short sale if the 2nd accepts $1000 or less.
Do you know how much the second will accept? If it is not too much, you could offer to buy the second for that amount subject to the short sale being approved and then since you own the second, you can accept $1000 from the first and get your short sale.