Chapter 7 saves deal from Trustee Sale
Can you stand another short sale question? I have a deal that I need some help with.
Details: 1st mortgage $125K, 2nd mortgage $36K, I have a buyer for $150K which is fair market value. The homeowner has provided all of the documentation required from CountryWide (the 1st). The comparative market anylasis I got from a realtor came out at $132K. My offer will be $105K to first and $4K to the second mortgage. Here is my problem.. today is Wednesday and the Trustee Sale date is Friday. The homeowner is filing a chapter 7 bankruptcy to be recorded tomorrow at the BK court house. I have not received any type of confirmation or acceptance from the 1st mortgage holder. The homeowner does not intend to follow thru with the BK and will dismiss it as soon as we can get a deal worked out with the 1st mort.
My question, what is the best way to proceed now? Will CountryWide continue the negotiations with me while she is in bankruptcy? Did this help or hinder me? This homeowner has deeded me her property and we have it set in place with a Land Trust to protect the property. I have a buyer lined up with pre-approved money, ready to write a check.
Thank you in advance for your expert advice.
p.s. I received the e-mail notification about the tele-conference course on short sales, but could not figure out when it will start - what days and times. I think that would be a very valuable tool, thank you for coming up with that idea.
Just curious, no one has responded to this question, is it not something that many people deal with? Do you have any suggestions of where to find the answer to this question?
Details: 1st mortgage $125K, 2nd mortgage $36K, I have a buyer for $150K which is fair market value. The homeowner has provided all of the documentation required from CountryWide (the 1st). The comparative market anylasis I got from a realtor came out at $132K. My offer will be $105K to first and $4K to the second mortgage.
CountryWide is somewhat hard to short sale. Since you had a realtor do comps and it came out to $132K, it is to your advantage. If you can show the lender(s) that it has an upside down mortgage vs. lein scenario, then you should be able to short sale it better. When short saling, you have to show them that they are better off short saling it to you than to let it go to auction.
Here is my problem.. today is Wednesday and the Trustee Sale date is Friday. The homeowner is filing a chapter 7 bankruptcy to be recorded tomorrow at the BK court house. I have not received any type of confirmation or acceptance from the 1st mortgage holder. The homeowner does not intend to follow thru with the BK and will dismiss it as soon as we can get a deal worked out with the 1st mort.
If the homeowner declares bankruptcy, then you have to wait until the proceedings are over before you can work out a deal. It is more complex and needs a lot more paperwork. If you mention to the lenders that the owner has filed for bankruptcy, then that may give you an edge.
My question, what is the best way to proceed now? Will CountryWide continue the negotiations with me while she is in bankruptcy? Did this help or hinder me? This homeowner has deeded me her property and we have it set in place with a Land Trust to protect the property. I have a buyer lined up with pre-approved money, ready to write a check.
It all depends on how CountryWide wants to handle this situation. They may continue negotiations if you mention that she filed for bankruptcy. You never know until you ask! Ask if they will negotiate with you if she filed bankruptcy, they may reconsider their options. They may not, some banks can be stubborn and are willing to lose big.
Hope this helps.
Tanya
I admit that I dont do those so-called "short sale" deals...because, frankly, a number of years ago I did try to convince a mortgage co that they should reduce their upside down mortgage balance to market value of property. They had absolutely no motivation(and I had to agree with them)due to fact that most such mortgages are sold to secondary market(fnma,gnma,etc)...which means that if there is a default the mtg co forecloses and then get paid off either by secondary lender of by mortgage insurance. I can only see where banks, who are directly exposed would have motivation to do a short sale. Where am I wrong?
The only time a first mortgage will be paid off in full is if the second leinholder forecloses on the property. If not one bids on the property, then the second leinholder has to payoff the first leinholder to obtain the property as a bank REO.
Banks short sale because they are convinced they will get more money from the short sale than at the foreclosure auction. Also, when an investor is contacting the bank, telling them they will pay X amount of dollars...the banks will short sale because it is guaranteed they will get some money from the short sale instead of nothing at the auction.
There are many reasons a bank will accept a short sale. You just have to convince them to accept your proposal.
Tanya