Can I Short This?
I have what I think is a short candidate. She bought the house in March 03 and hasn't made one payment. Believe it or not, Lasalle bank would like to foreclose. She filed Chapt. 11 back in November.
The original loan was for $78K, she owes $20K in interest and penalties, and the FMV is $106K. I have two questions: Does the bankruptcy impact a short sale and will the bank accept the short deal with a FMV being what it is?
Principal $78,750
Interest $13,500
Funds advanced $1,316
Legal $1,417
Escrow impound $3,445
misc. $2,000
Thoughs?
I would say you might have a chance.
Lenders discount based on the Broker's Price Opinion (BPO). With the numbers you gave, you should be able to shave off a discount. If its FHA, they can accept up to 82% of BPO (net).
Good investing!
Bginvestor