Can I short sale a property that's already been foreclosed on?
I am new to REI. We've been gaining knowledge over the last several months, but have not yet done a deal.
There is a property that I'm interested in acquiring to flip to a rehabber. It's already been foreclosed on and is now owned by the lender. Should I contact the Loss Mitigation Dept. and attempt to short sell it, or should I just make the bank a low offer?
Thanks for your help.
Hi crf3boys,
If the property has ALREADY been foreclosed on, then the only option you have is to contact the Loss Mitigation Dept and make the bank a direct offer. You can't short sale a foreclosed property.
The Gist: Short sales are used only when the homeowner STILL owns the property even through the property is in default and foreclosure is imminent or pending.
As long as the homeowner STILL owns the property you can enter into an agreement with homeowner to negotiate with the bank to "approve" and "accept" the deep discounted price (short sale) you will buy the property at from the homeowner.
Short sales are about understanding the process and working it through. There's a lot of work involved in the process, especially if the mortgage is financed by FHA.
I STRONGLY suggest that you read through the message achives of the "Pre-foreclosure/Short Sale Forum" here at TCI. It is really excellent. EVERYTHING you need to know to successfully do short sales can be found in this forum. It's a great... quick... and easy way to get up the curve on short sales.
Standout gurus for this forum are Dawn Bent, Sharon Restrepo, and TheShortSalesPro (who runs his own forum for short sales). Their expertise is invaluable, what they share about their experiences is priceless!
Good luck with your real estate investing!
dmarketing
[ Edited by dmarketing on Date 04/12/2003 ][ Edited by dmarketing on Date 04/28/2003 ]
Too late for the Loss Mitigation Department. Now it's the OREO (other real estate owned) Department.
The Proposal process is much the same. You'll still want to denigrate the owner's perception of value. You may be directed to place your offer with their Realtor.
I'm trying to learn quick about these foreclosures have ben studying Dwan and Sharons material . There is a foreclosure I have been following and if I had known some of this stuff before I would have made a bid w/ realtor
It is scheduled next wk forecloure My understanding is that the bank will buy it back then auction it off later There are SBA and IRS liens also
Is there a certain place to learn about foreclosure statutes I ask the desk person at the foreclosure dept about a written procedure re: time limits etc. But no help there , she said it was too complicated
In the legal sec of paper it says: Foreclosure Cases, then lists Foreclodure Sales. Are the Pre-Foreclosures under "cases"?
When the lender records a "Notice of Default" or "Lis Pendens" at the county courthouse, then a court date is set with the homeowner to try and resolve the issue. Once you find a homeowner in foreclosure, there will be a case file on the property. You can find out all the information you need in the case file....all you need is the case number. You can then go to the courthouse and request that particular case file. It will show what lender is foreclosing, how much is owed, when the first NOD or lis pendens was recorded, etc.
Tanya