Foreclosure University Short Sales

Question: Can a 3rd party, acting on behalf of a 2nd mortgagee prevent the closing of an approved Short Sale by refusing to accept the amount offered them by the 1st mortgagee?

Answer: – Yes they can… Many times mortgage companies will have 3rd party collection agencies deal with negotiating payoffs.  If they don’t like the offer they don’t have to accept it.  Sometimes they can very difficult to work with.  They only way is to either give them what they want by handling it outside of closing or negotiate with them more until they decide to accept.

Question: I made an offer to short sale a home. Now after all the months of waiting, bank couter offered my offer.  Can I counter offer or do i have to just accept the price the bank wants for the short sale home?

Answer: -Absolutely…a lot of being successful in this business is your ability to negotiate.  Your ability to negotiate and negotiate well literally will make you thousands more or cost you thousands.  If they countered with a higher price, this means they believe the house is worth more than what you proposed in your offer.  You will need to explain to the lender why you believe it’s not worth that and you’ll have to back it up with comps, repair costs, market conditions, pictures, etc.  You may need to even ask for another BPO (Brokers Price Opinion).  Now…if it’s only a few thousand dollars and your end buyer is all lined up and as it is you stand to make a large profit from it, you might want to consider just doing the deal and moving on to the next one.  You don’t want to wait another 2 months before they accept your offer because you might lose your buyer.

Question: Looking at short-sale, foreclosure, or bankruptcy… only is Social Security Disability, VA Disability (100%), and disability insurance monthly payment… what should I do? can they come after any of my income in a deficiency judgement? will they even come after me? how will bankruptcy affect me… I currently have NO assets at all except for about 15,000 dollars in savings. thanks Tom from FLORIDA

Answer: -Tom, I have to make the assumption that you’re planning on or you’ve already stopped making payments on your home or you wouldn’t be asking these questions.  A short sale in my opinion is by far the best option if you can’t sell your home for what’s owed, rent it out or can’t work out something with the bank like a forbearance or loan modification.  A short sale will affect your credit but will eliminate a foreclosure on it.  If done properly will also eliminate the possibility of a  deficiency judgment.  If a short sale is not accepted an ultimately your home ends up at the foreclosure auction, then you will either receive a 1099 or they will file a deficiency judgment against you.  If they file a deficiency judgment and you can’t pay, they can garnish wages.  Depending on the amount of the judgment, this forces most people to file bankruptcy to eliminate the judgment.

Question: If I declare bankruptcy now with regard to my other debts, will it prevent the short sale from going through?

Answer: -No.  Bankruptcy only postpones an auction or short sale which buys you more time.  In fact, many short sale investors will use bankruptcy as an option if they need to buy more time so it doesn’t go to auction, as long as it’s in the best interest of the homeowner.

Question: Does the fact that my mortgage is 55% of my income help me prove financial hardship?  Can I short sell my condo to my fiance before we get married?  Should I consult a real estate attorney or an agent for help?  Any help on this would be greatly appreciated. Thank you!

Answer: -55% is a lot, but may not prove financial hardship, unless you’ve had a loss in income or increase in bills or something like that.  You can short sell you home to anyone you want as long as they are not related, but you also risk not getting the short sale approved in which then your home will go to auction and then the 2nd may file a judgment against you for the amount they lost.  But if that’s your best option then, yes a short sale is a great route to go.  I would definitely seek help from an agent if you need to find some buyers…or investors in your area would probably love to do a short sale on them.