SS Advice
Just got the deed from a person who owes 280k principle on the first to Chase, and 70k principle on the second to Wachovia. She is 4 months behind and both Chase and Wachovia have sent her letters from their lawyers about the impending foreclosure. She has not been served with the Lis Pendens. In FL it takes about 90 days for a foreclosure once the LS is served. The FMV of the house is up for debate, but somewhere around 320k. The house is new, in great condition, and vacant. The owner has given me a key.
1) Anyone have any personal experience working with Chase and Wachovia.
2) What is the best deal that I could expect to cut. I hear 70% on the first and 10% of the second. Is is 70% of the FMV or 70% of the principle balance?
3) Anyone have the phone numbers for Loss Mitigation in Chase and Wachovia?
4) When I contact Wachovia what do I tell them. Do I still ask for the Loss Mitigation department. Last time I did a SS I told them that I was a deliquent note buyer. They seemed to like that. Should I be straight up and tell them that I am trying to work out a deal with Chase also and that I need them to drastically cut their price to make it work?
5) WHen the appraiser comes for the interior inspection, has anyone intentionally done something to make the house less desireable? I was thinking of removing the faucets and light fixtures. I would put them all back after the inspection. Once I went to an high end "handyman special" and all the house needed was faucets and light fixtures.
Any advice is appreciated.
Brenda
I have experienced that it is not uncommon for the bank to accept up to a 50% discount on the first. Try calling the second and telling them that the homeowner is about to foreclose and the only other alternative is bankrupcy. I was taught to only offer the 2nd $500-$1,000. I have tried it twice and got both to agree. One at $1,000 flat and the other at $1,350. Both second mortgages were roughly $16,000 a piece. I didn't believe it at first but try it. I have learned a lot that I has helped me over the last couple of months. Just do it!
It doesn't appear that there is any reason for the first position mortgagee to discount much, if anything at all. The second should agree to play ball.... but it seems that the former homeowner may milked/bilked the second... which could jeopardize their willingness to cooperate.
In either scenario, you'll need the continued cooperation of the former homeowner to effectuate a short sale.
Do nothing to fake out the lenders. Hindering the creditor and fraud are illegal and even one day in jail was enough for me for doing pretty much the same thing. I was able to get off because of the length of time since the crime. Don't do it. 1st will probably not deal. 2nd can step in and cure the first and foreclose also. They do not have to deal and may not if there is equity.
Good LUCK and Thank You
Hope this helps some
Ted Jr
Brenda,
Look up the institutions on the internet and there will be contact info there on the sites. You can do a search in any search engine. I happen to be a Google fan, but you are free to use any of them. good luck and holler if you need help.
Why might the 1st not deal. Is it because their principle balance is 280k and the house is worth 320k?
When you say that the 2nd might cure the first and then foreclose. Are you saying that the 2nd might buy the mortgage from the first?
In what order do you work the 1st and 2nd. Should I try to deal with Chase (1st), then Wachovia (2nd).
What do you tell the second. "hey it is going to foreclosure you are going to get wiped. let me assume the mortgage at a discount because ....." What do you tell them is your interest in the property.
Thanks
Brenda
You aren't sure about the value of the house. At some point in recent history the second mortgagee must have thought it worth at least $375,000 to justify a second of $70,000 behind a first of $280,000.
You state it's in good condition. Excellent, in fact. Strike 2.
The second mortgagee will laugh if you tell them that they'll be wiped away at Sheriff's Sale. Unless you know that for a fact, don't bluff them. That only antagonizes them.
You don't want to tip your hand (inexperience) to them this early on in your relationship....
Your first couple of calls should be to gather information... save your Proposal for someone whop has the authority to respond... and that will come later on. Just prequalify the short sale candidate, then get the process in motion.[ Edited by TheShortSalePro on Date 01/05/2004 ]
Thanks for the info. I just purchased your primer (sent to my house) and read your articles. I have two short sells that I am working and need to get educated fast.
I thought a sherriff's sale (In Orlando we call it a sale on the court house steps) wiped out all but the first. That is not true?
Brenda
The Courthouse sale wipes out junior liens. So if the second is the one forclosing, the first remains in place. Always do a title search before buying at auction.
Thanks, Brenda. My records indicate that you purchased the E-Book, which isn't quite the same thing as the printed version which is shipped to you includes an hour of E-Support, and a handful of inserts.
If my records are incorrect, please advise.
While it is true that junior liens, in this case a second mortgagee, are extinguished at a foreclosure sale, they are only extinguished if the second mortgagee does nothing to prevent it.
Depending upon the lender, and their in-house policies with regard to short sales... they can join the foreclosure lawsuit, or make arrangements to buy the first at a discount, or even pay it off in full....
So, despite what you may have read or been told, the simple act of a senior lienholder initiating mortgage foreclosure doesn't necessarily mean that the juniors have no standing.
They do. And if there is equity, they'll make every effort to protect their recovery.