I Need Some Help
I just decided to work on buying properties to flip a little harde and placed a classified ad. My first 2 calls are both going into foreclosure.
1. FMV $75,000.00 1st thru loan services-$65,000.00 2nd C link- $20,000.00
Excellent condition-
Been behind: now current, OK so not in foreclosure.
Going to have major surgery Knows will get behind again.
I said I didn't know how to help her and not lose money.
Deal #2
FMV $63,000.00
Balance $60,000.00
3 months arrearage 1 foreclosure notice. Seller will sell for balance (No kidding)
Cendant Mortgage sole lienholder (before DD)
Had Fire last year and so inside now excellent condition. New Carpet, Paint, Wallpaper, Floors redone.
Exterior weak, needs siding.
Any suggestions, or do I need to buy the full blown Short sale Course?
Thanks in advance,
Shawn(OH)
These are a couple of good deals.
Deal #1:
Let them get behind a few months, then call the lender and do a short sale. You should be able to get the 2nd wiped out (or very discounted) and get the 1st discounted as well. The key is making the bank understand how bad the situation is and how they'll loose money if they foreclose.
FMV $75,000
1st $65,000 discounted 30% to $45,500
2nd $20,000 discounted 75% to $5,000
Total: $50,000!
Deal #2
Get warranty deed and Authorization to Release information. Call the bank and start the short sale process. Talk up the bad condition of the outside, get low comps, etc.
FMV $63,000
1st: $60,000 discounted 30% to $42,000
New LTV = 66%
The Mr. Preforeclosure course has a lot of great info in it regarding short sales.
Jeremy B
How do you get the 1st to discount 30%?
Have you actually done this before?
From the short sales that I have tried, the lowest they will only go is 82% of the fair market value of the house. However, it's usually around 90% to 95%.
Mrs. Meltzer
Quite right they will only go now more than 80 % off the appraised value.
SKI
Jbrandt's posted reply is, in my opinion, casually unrealistic...
The first mortgagee would have little or no reason to consider a short.
** Somewhere along the way a great many people have come to believe that seconds are automatically wiped away (the correct term is 'extinguished') if the first mortgagee forecloses.... this simply isn't true. Yes, their position is at risk, but they may act to protect their interest. Even though the security interest is extinguishable, the homeowners may still be liable for the amount via the mortgage note.****
The second mortgagee, as jbrandt suggests, would likely consider accepting a reduced payoff.
Without knowing too much about the situation, I would guestimate that the second would ascertain the property's as-is, FMV. From that they would determine their own inhouse foreclosure costs, costs to acquire and hold the property until it could be liquidated and sold as an REO, and from that, determine what payoff would permit their recovery to break even.
If the FMV is $75,000, with a $65,000 1st leaves $10,000 gross payoff for junior lienholders. Would they accept $5,000?
Maybe.