Short Sale Question..
Hi everyone i just wanted to find out something. I was reading this forum and alot of people is saying short sale the second and do a full pay off on the first.. If you short sale the second, can you short sale the first also? I just wanted to know cause i dont see anyone talking about short saling both..
thanks.......
It depends on the motivation and how you can sell it to a lender.
Let's say you have a $100K property FMV for all the examples below.
IF the first is at $70K and the 2nd is at $30K or more then the 2nd would or better should be motivated to do a short sale as after they foreclose they will be in the hole anyway and won't want to spend the money to do a short sale.
Why would the first mortgage do a short sale when they are at a 70% LTV? They may take a very small discount for the "hassle" factor, but that is about it.
The higher the LTV of the 1st the more motivated the 2nd will be, due to having a smaller claim on the house.
You may be able to work a deal where you short sale both, but for the 1st to be motivated enough, your 2nd will almost have to just want to walk away. Seldom is there enough motivation for both to short sale.
Oh i see now.. So what you are saying is there is hope short saling a mortgage even though it has equity in the property?...
Oh i see now.. So what you are saying is there is hope short saling a mortgage even though it has equity in the property?...
There hope, but very little. The number change with the following:
1. the amount of equity
2. the length of default
3. your current market
4. banks motivation
The amount of Equity in a property is almost a subjective number. You can provide numbers to the bank to influence the FMV down and then turn around and provide numbers to a buyer to influence the FMV up. That difference is your cake.
General rule of thumb though is the more Equity, the less hope there is. If there is that much equity, why are worried about short saleing anyway, just get the property.[ Edited by dnvrkid on Date 11/24/2004 ]
Thats right you have a point.. thanks for your reply