Getting the Second to Budge
Hi Folks:
I'm been working on this short sale where the property is worth, in its present condition, approximately $120,000; should be worth roughly $140K when its all fixed up. The first mortgage is for $71K; the second is for $54. I put together a short sale proposal for $81K which would essentially pay off the first and give the second $10K. Among other things the short sale package I prepared included approximately $11K in repair costs. The second mortgage holder, Bank of America, has come back with a counter of $110K meaning they will eat roughly $14K of the amount they are owed. The first is getting the full amount of the payoff. Ideally I'd like to pick it up the property for under $100K which is roughly a $24K loss to the second mortgagee. How do I convince them to come down further? Should I simply mention that I am willing to wait for the property to be sold at the courthouse at which time the second would be wiped clean??? Any help in this regard would be appreciated.
Assume that the 2nd will strive to protect it's investment. Why assume that the 2nd would be wiped clean (extinguished) at Sheriff's Sale? It would only be extinguished if the 2nd failed to act.
The 2nd could easily join in the the foreclosure and assign a rep to bid at the sale up to the property's as-is, FMV or whatever the 2nd has determined to be their upset price.
Yes, advise tham that you are willing to increase you offer, slightly, but are prepared to bid at sale. I would bring to their attention their exposure to additional legal fees and sheriff's sale commission if they participated in sale, and perhaps you can negotiate a payoff.
Had you offered to purchase the mortgage, or simply pay it off?
Assume that the 2nd will strive to protect it's investment. Why assume that the 2nd would be wiped clean (extinguished) at Sheriff's Sale? It would only be extinguished if the 2nd failed to act.
The 2nd could easily join in the the foreclosure and assign a rep to bid at the sale up to the property's as-is, FMV or whatever the 2nd has determined to be their upset price.
Yes, advise tham that you are willing to increase you offer, slightly, but are prepared to bid at sale. I would bring to their attention their exposure to additional legal fees and sheriff's sale commission if they participated in sale, and perhaps you can negotiate a payoff.
Had you offered to purchase the mortgage, or simply pay it off?
Shortsalepro:
As always, you live up to your name. My offer was simply for a short payoff. I didn't think to ask for a discounted purchase of the loan. Has it been your experience that banks may be unwilling to short their loan but would, indeed, sell it at a discount instead? Thanks again for your help.
Sometimes they are willing to sell the mortgage at a discount instead of risking being extinguished at Sale, or spending $$$ to foreclose.
Depends upon their philosophy of the day.
When I make a ss proposal, I project each scenario (addressing and answering their objections in advance) so that they'll have all information necessary to make an informed decision.
Yes, it's more time consuming on my part.... but I don't do volume. I handpick each prequalified short sale candidate. I do one at a time. I do it as well as I can.
I am intimate with each Proposal and regard each communication with the foreclosing mortgagee as a chance to learn more about their own criteria.
Some overworked asset manager might react well to a certified check and a request to purchase the mortgage via an assignment of mortgage (subject to due diligence/title search).
It clears a file from their desk, and reduced their workload. Remember, they are people, too.
After you complete a successful short sale, it's a nice idea to send (in confidence) the asset manager a small gift of appreciation.