Bankruptcy To Foreclosure To Short Sale???
I am trying to get my hands on a property that the comps say is valued at $450. After being on the market for 200+ days the owners claimed bankruptcy. The owners are cooperating with me to clear the house from bankruptcy and get it back into Countrywide's foreclosure process which would then allow us to offer a short sale. I have ZERO experience at this and after reading through the forums am scared that my family may be waisting valuable time. Our house has sold, we have about 30 days to move out and I have found nothing out there that I like. Then....this property came along that I love...for the right price. What is your advice or experience in this situation? I WANT THIS HOUSE FOR MY PERSONAL HOME and the owners want us to have it, which is why they are helping us. PLEASE HELP ME NOT TO LOSE THIS!! 
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Will you be able to effectuate a short sale within a month? Not likely.
You really haven't included enough info to speculate on whether this is a viable short sale candidate.
[addsig]
I am so glad that you are the one that responded!! What type of information can I give you to help you understand my situation? I am aware that 30 days is not nearly enough time. However, I am terrified that my husband and I don't know what we are doing and once this guy clears the house from the bankruptcy courts and it gets to the foreclosure process that someone will see it pop up and take it out from under us. Here is a letter that might help to shed some light as to where we are in the process. It was written to me from the home owner. Should my husband and I hire a real estate attorney?
lifted because we are behind on the payments. The court would lift the "stay" and Countrywide could then proceed with a foreclosure. This process was done last June on the second mortgage but never on the first mortgage. The lady at Countrywide didn't know why they didn't do the first mortgage at the same time.
As I discussed with you on the phone today, I was able to learn a few things about what it will take to get the information we need to proceed with a deal on the house.
I spoke to the attorney's in Addison that we wrote to earlier this week. The person I talked to said he could not discuss the situation with me because of the confidentiality rules involved in the bankruptcy. But he did give me a direct number to Countrywide's mortgage "work out" department for past due loans.
I called the number and again ran into the confidentiality wall, but the lady did forward me to the bankruptcy department where I finally got to talk to someone who could answer my questions and tell me what I had to do to move this situation along. The following is a summary of what I learned today, plus some things I know from going thru the bankruptcy process.
Normally at this stage, Countrywide would file a motion with the court to have the bankruptcy provisions (called a "stay"
The lady I talked to at Countrywide told me the company had not even released the file to her to start the process of filing the court motion and until they did, she could not give me any indication of how long it would take to process the court motion. Once the company does release the file, she starts the process and even then the timetable can vary depending on how busy the courts and attorneys are. But basically until this process starts and is completed Countrywide is not in a position to negotiate on an amount they would be willing to settle on to sell the house.
However, once the "stay" has been lifted, my loan passes back to the "work out" department and they would be authorized to negotiate what is called a "short sale" on the property, rather than go thru the foreclosure process. A "short sale" is where they agree to take an amount less than what they are owed (which would include loan principle, accrued interest, late fees, legal fees, property taxes, etc).
I have heard from others that most big mortgage companies do not like to foreclose and wind up with a bunch of property they then have to dispose of. But I do not know if this is a fact or not. Given the high volumes of foreclosures going on these days, I doubt the mortgage company wants a large number of vacant properties sitting around, so I would think they would welcome an interested buyer.
I asked the lady I spoke to if there was anything I could do to speed the process along. She said that I could go to the bankruptcy trustee thru my attorney and request the stay be lifted and then fax or mail Countrywide the court release and that would be faster than waiting for Countrywide to do it. She also gave me the name and address of the Countrywide office in Plano to send the court release to.
So I will contact my bankruptcy attorney tomorrow and discuss all this with her to see if we can do that. I will also ask what her estimate of a timetable would be for the process. I know that she is usually in bankruptcy hearings on Tues-Wed-Thurs, so I will email her and leave her a voice mail and maybe I will hear from her before Friday.
I will keep you posted on what I find out. But the bottom line is - this is likely to take at least a couple of months and quite possibly more. So, I doubt we can get this to a stage by late June where we were certain enough of a deal that you could consider renting the house until it is done. So if you have to be out of your house by late June, you will most likely have to make temporary living arrangements at least until we get a little further down the road.
Hopefully after I talk to my bankruptcy attorney this week, we will have a better idea of a timetable and you can make your decision from there.
In the meantime, our friend at the title company has requested a payoff balance on the loans from Countrywide and they usually respond within 48 - 72 hours. So we should hear something on that by Thurs-Fri. I will tell you that the numbers that come back from this request will be the worst case numbers on the house because according to the lady in the bankruptcy department, Countrywide is not in a position to negotiate a lesser number because of the bankruptcy stay (so it will include everything that is past due). But it will give you an idea of the highest number they could ask for.
I know this may be a long drawn out process and if you don't want to wait that long, or if something you like better (and is a simpler deal) comes along I understand, just let me know. But if you want to work thru this process I will do everything I can to help get it done as quickly as possible and get the price on the deal as low as possible.
Our friend at the title company said she would waive her fees to help us out on closing costs and once we get the amount from Countrywide, we can go back to the real estate agents and try to negotiate with them on the commissions.
Sorry this has been such a long report, but hopefully I have covered all the bases. If you have any questions, please do not hesitate to call or email me. I really do not mind.
Thank you for your interest in our house and I look forward to getting this all worked out for you.
In the meantime, keep we'll all keep praying and the Lord will work it out for our good.
J.F
"Should my husband and I hire a real estate attorney?"
Eventually, yes. To supervise the closing. His or her area of expertise. Why pay an attorney $150 to $250 per hour to do the gruntwork?
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When you say to supervise the closing, do you mean the presentation of the short sale terms? I am sorry that I don't know all of the "lingo" but I have learned so much through all of this. I find it incredibly interesting!! As far as the grunt work, what more do we need to do? Aren't we just waiting for Countrywide to let us know whether or not they are willing to entertain a short sale? How will I know when Countrywide will be sending someone to do an inspection. I read in one of your articles that I should be there for that with a list of "things to be repaired" as well as some local sold comps.
Thank you for taking the time to respond to a couple really NEW at this!!