Short Sale Pro, Read This, Short And Junior Lien Foreclosure
My Situation:
I have my short sale offer approved by Household Financial
Both mortgages are with HFC
Total Payoff, 146k 1st & 2nd
My offer 95k (accepted)
ARV 140k, repairs 5k
Sounds Good now the Problem:
This week the Home Owners Association Foreclosed on the Property in Florida.
That happens a lot down here.
I know the Plaintiffs (HOA) attorney and he will sell me the judgment
I have bought one from him before, cost $1900.00
Problem:
My attorney tells me I can’t sign a contract with the owner in default (required in the Short sale Pkg from HFC) or a Quitclaim deed
because he doesn’t own the property anymore.
If I did it would be Fraud and if HFC found out while they are processing my 95k check It could get real messy.
He suggested I call HFC and tell them about the HOA Foreclosure and see if they still want to proceed with the deal as planned.
But If I do that then HFC now knows that someone else has brought the Property and may cancel my Short sale offer?
In Florida there is a 10 day Foreclosure objection period, means I will get Certificate of Title (judgment in this case) from the HOA Attorney and title “Subject to”
Thanks for your response
David
I'm not an attorney, but I see no reason why the homeowner in possession can't give you a QCD.. a QCD simply conveys whatever interest he/she may have in the property. If they have no interest, then the QCD conveys no interest. But, I'm not privy to all the facts, and I rarely recommend grabbing the deed in a short sale transaction...
The Purchase and Sale Agreement with the homeowner in possession that you present to the mortgagee should briefly, but accurately reflect the particulars...
"This sale is subject to mortgagee written short sale approval, and HOA foreclosure proceedings. The Purchaser holds or will hold a Certificate of Title resulting from HOA foreclosure."
I'm not recommending that you ignore your lawyer's advice. But, get your money's worth. Throw it in his lap and ask what language could be used to 1) protect you while not jeopardizing your deal, and 2), complete the transaction.
If your lawyer can't think outside the box, find one who does.
[addsig]
The HOA is foreclosing, or foreclosed?
I really do not understand the problem. You negotiate with the HOA, you put their payoff amount on the Seller's side of the HUD and HFC and the HOA get paid out of closing.
>My attorney tells me I can’t sign a contract with the owner in default (required in the Short sale Pkg from HFC) or a Quitclaim deed
because he doesn’t own the property anymore
Who owns the property? Did you get the deed? What contract are you signing. And what does that have to do with the HOA?
Brenda
Well I'm no expert on Florida law.
Does the HOA lien come before or behind the mortgage?
Anybody could sign a quitclaim deed. (Hell, I'll sell you my interest in that property for $100.00-- not that I have any).
Given that 10 days is a pretty short redemption period why not front the $1,900 to the home owner and let them go redeem? (Given acceptable other documentation). Another $2 grand is not going to kill this deal.
ShortSale Pro
Thanks, I agree I will add the additional statement about the HOA lien on the line for Additional terms in the Contract
Then send the Package to the Lender and see if they approve
Also, QCD doesn't hurt even though I will be recording Cert of Title right after
Thanks Again
David
Brenda,
The contract for sale is required from the Lender in the Short sale package
They believe the owner in default still is owner of the property, But in reality he doesn't because of the HOA Foreclsoure this week.
See I'm in the Middle here
I will buy the HOA Judgment, gives me right to Title the Property
But Since the Properpty has been sold At Auction, to a junior lein Holder the Lender may say No on the Short.
Why because the owner (HOA) now has the Prop Subject 2 the 2 defaulted Mortgages