All's Quiet on the Short Sale Front
Well, it's been nearly a week since I was last able to contact or get a word of response from the 1st mortgagee. They said that it would be "reviewed" by an "analyst".
I have an ominous feeling that TheShortSalePro's advice that the 1st mortgagee will not budge because their loan is right on par with ARV on the property is painfully correct. 
I was hoping against hope of otherwise, praying for a miracle; but time is running out.
The homeowner will be filing Chapter 7 officially sometime next week. If I can't get a definate response from the lenders, the deal is canned.
Does anyone have any success stories regarding full LTV on a 1st mortgage? With all due respect to ShortSalePro, I'm hoping someone will disagree with your description and provide some glimmer of hope.
I'm really frightened of investing now; the process with this first "experimental" deal has been wretched. Even with a homeowner who could care less what happens, to boot. The factors and variables couldn't be better. But it's still falling apart. What do I do when I convince some other homeowner that I can save them from foreclosure, and this same friggin' thing happens again?
I feel as though I'm standing in an empty field waiting for the magic beans to sprout and give me the beanstalk to climb up into the clouds.
Except the field is covered in clay, there's no water for miles, and the sun only shines for 5 minutes each day.
All's quiet on the short sale front.
Andrew
Dreadfully discouraged..
Andrew,
There is light at the end of the tunnel.
When the Stock Market guys quit pouring money into real estate, then the banks may be a little more apt to take offers, of course the market is down so you could buy stock and wait for the market to go back up.
If you think you are alone in a crowd, you must realize how the Stock Market guys felt when the market went south.
Change stratagies in your investing efforts for the time being, get back in the sun and fun.
John $Cash$ Locke
Hey Andrew,
I am a newbie and still working on my first deal. It is a little disheartening to hear about the problems that you are going through. The only thing that I can suggest, since I am a newbie with no deal yet, is to change your way of thinking. I have had some things that came along that didn't work out. I have yet to get discouraged. I am still getting calls and I know that it is a numbers game. It is all in the way you look at things. Sure things may be going pretty bad with this deal. But it may get better with the next deal. So say, for example, that out of 20 possibilities you get 1 deal. Just look at this as 19 more possibilities before you get a short sale. I already think of myself as being a successful real estate investor. My life has already changed and I know that I will make this work. Even though I still haven't made a deal yet.
Keep going,
Tom
Shorts aren't the answer for every, or even most opportunities. But when shorts are indicated, they can be very rewarding.
There is a learning curve to shorts, as well as every strategy. Chalk this up to tuition.
Forgot to mention, it's important to recognise the elements of a successful short sale. Weed out the ones that have little or no chance of success, and concentrate on those that have a 50% or better chance.
What exactly are the elements of a short sale? Can you give me examples of opportunities that demonstrate elements of a good short sale? In Dwan Bent's January article, she discusses a house with a value of $100k and a mortgage of $95k. My figures are similar minus the moronic 2nd mortgage for another $50k.
Setting aside the 2nd mortgage temporarily, I have a $100k house with a $98k loan. If I can't negotiate on this, then it invalidates the example provided in Dwan's article, regardless of the 2nd, thereby casting a shadow on the entire concept of short sale. True, this could be an isolated situation; but everyone here seems to agree that I should look for "better deals." The only difference is $3k between the example and my real (dead) deal.
Andrew
Quote:
On 2003-02-28 14:04, TheShortSalePro wrote:
Forgot to mention, it's important to recognise the elements of a successful short sale. Weed out the ones that have little or no chance of success, and concentrate on those that have a 50% or better chance.
The $50,000 2nd makes this problematic. I doubt that they would accept zero to release their security interest.
If the 2nd were not in place... and all that remained was a $98,000 1st.. then the first would probably concede. The amount of it's concessions would depend largely upon the strength of your Proposal.
The presence of a $50,000 second behind the first indicates to the 1st that the property is probably worth at least $150,000... and unless you have some very compelling evidence to contradict the presumed value... the first won't be moved to 'budge'
It's the strength of the information that you present in your Proposal. If it's compelling, you'll win. If it's cookie cutter stuff... it probably won't be compelling.
That's why I hand pick my shorts. I know beforehand if it has a chance to succeed.
I probably pass on deals that could work... but I also accept some that I don't think have much chance of success.
Sometimes I'm surprised that Proposals are accepted, and dismayed when they are not. It's a dynamic business. Each lender has their own quirks and personalities.
You'll learn as you go.... as we all have.
I appreciate your response and honesty. It's just what I'd been needing to hear. I was beginning to think I was loosing my mind.
Now, would you feel it out of line to perhaps fax an appraisal (done within the last year or so) reflecting the market value of the house at about $103k (I think) to the 1st lender?
I see what you mean that they'd be more hesitant if they see the property is loaned for $150k. What options could I have to illustrate to the 1st lender that, well, basically the junior lien totally screwed up? I suppose comps, but I've already sent those.
I appreciate your willingness to help and it has been a great tool. Sometimes you have to really hammer things into my brain to get the clue across.
Thank you again,
Andrew
I have no idea how your Proposal was structured or presented.
When an electrician is called in to fix a suspected problem in a myriad of wires.... he could painstakenly check each wire... or cut out the clusterfuck and start fresh.
Your Proposal should start with a solid foundation. Spelling, neatness, and accuracy counts.
If you want an "A" on a research paper, do you hand your professor a pile of papers, disorganized, some handwritten, some typed, some missing? No.
A short sale proposal should be prepared and presented in much the same way as you would a comprehensive research paper.
Perhaps you would share with us the Proposal's Executive Summary? If you didn't include one with your proposal, don't worry. Most people don't. But I do.
I don't bang out 100 short sale proposals (cookie cutter style) per year. Maybe I do 25. They all stand out and apart from the typical garbage that sit in piles upon the asset managers' desks. Maybe 20 of the 25 are successful.
WonderBoy,
I say you are in the midst of a rich
and valuable learning curve.
When in Hell, dont stop!
Keep Going!
If theres one thing I've learned in my life its that you cant keep a good man down
J