Short Sale, Deficiency And Cash To Seller
Short Sale, Deficiency and Cash to seller
Thanks for all replies
How does one short a 2nd mortgage and then pay the seller some cash?
This is a pretty house and the seller deserves some cash outside of the deal.
Can It be done legally and still have a zero for the seller on the HUD-1?
One Idea I have, the seller needs a used car, about 5k I would buy for them?
Deficiency:
I always ask the 2nd mortgage lender state in my short offer acceptance letter that they WILL NOT seek a deficiency judgment from the seller for the difference. If the lender agrees to the short with no deficiency will the seller still get a 1099 for the difference?
SS Pro
Thanks
How about any cash to the seller?
Is it possible?
Why not just fill out a Bill of Sale for several items in the house equal to the amount you are offering the Homeowner. I usually pay for appliances and such that are not mandatory in purchasing a home. Just food for thought
Yes, Bill of Sale is the best way to go.
That is totally seperate from the closing docs
Chris,
Thanks
Why is Deficiency a factor?
Because the Sellers Accountant told him that if the lender seeks a deficiency judgment he MIGHT get a 1099 for the difference of the short offer I made, In this case would be 41k
Short offer: 10k
2nd mtg: 51k
So 41k might be considered income to the seller if we do the deal?
SS Pro,
Thank You for clearing this up, very precise answer
If it were me, I would definitely have an attorney to protect my interests.
I would contact the legal department of the bank that did the foreclosure. If the former owner is challenging the foreclosure as a wrongful foreclosure, then you can be sure they will go after the deep pockets. It would most likely be in their interest to help you defend this case.
JS.
Yes, she can challlenge the foreclosure sale.
Yes, If the outcome will affect you financially, I strongly suggest you bring an attorney.