Questions On Short Sale Package
I've just received a short sale package from Household Finance. It reads:
"The following items will be needed in order to process this request:
* Account is to be paid in current status
>>>Does this mean I have to pay the arrears before they will even consider doing a short sale?<<<<<<<
Then later on in the document it states:
"Household Finance will retain the note on this loan. The borrower shall be responsible for any deficiency remaining on the balance. All terms of the original note shall remain in force."
>>>Does this mean that it will be impossible for me to pay a discounted amount in cash & that whatever I don't pay the sellers will be responsible for?
If so, would the sellers then be able to get out of paying by filing bankruptcy?<<<
I just got an approval letter from Household today. Started the SS about 2 months ago. When I called I was told that they did not have a SS package. All I was told to send it and sent in was a HUD1 and P&S. They never asked any questions. They sent out a PBO. Then they just said $64,000 ws the lowest they would go. I resisted for about two weeks, but my rep was impossible to get on the phone and her personality was zip. I must have called her 100 times, got her 10 times, and got a total of 20 minutes of her time. Decided that 64k was very workable and that time would run out before I could complete the transaction at that rate.
My approval letter says it will be Settled in Full and I was too dumb to even ask.
Brenda
Heather -
I am also working on a short sale with Beneficial and am in possession of the same form. As the first post on this topic states, Beneficial sent out a letter of acceptance on the short sale and accepted it as payment in full. I plan to skip the bullet regarding "Account is to be paid to current status" and address it both in the cover letter of the submittal package as well as have the homeowner discuss the fact they are unable to make their payments and that they are requesting Beneficial accept the short offer as payment in full.
I plan to address the fact that by acceptance of the offer, Beneficial is accepting the offer as payment in full and that the debt is to be "settled"
I'll let you know how it goes.
Heather, many Beneficial & HFC loans are handled by the branches that originate them.
Sometimes they do insist on retaining the Note after releasing their security interest... and pursuing the Homeowner for the deficiency. Sometimes, these notes are sold to collection firms who hound the former homeowners into some sort of settlement... or, new, high interest loans.
To answer your question, I would think that the unsecured debt would be dischargable in bankruptcy.... but the Homeowner had better not utter the "B" word beforehand...
I called Household for the 1st time today. They transferred me directly to the rep handling the case. She asked me when I was looking to close & I said 7 to 30 days, cash. She said, "Ok, I'll put in a rush order for a BPO - would you like to be the contact person for that?" Of course I said yes. She did all this & faxed the ss package even before I faxed her the release.
Is it normal for things to go this quickly? From everything I've heard, short sales are supposed to be a "pain." Maybe I should expect things to slow down from here on out?
Brenda - may I ask what the (repaired) FMV is on the property they said they would take $64,000 for? And how does that figure compare with the loan balance?
Thank you all for your helpful response. I plan to do as spurtle suggested - informing Household that by accepting the offer, they accept it as payment in full, without further liability to the sellers, etc.
Just a note, the sellers are already considering bankruptcy for the rest of their debt. Should I then ask them to postpone that step until after closing?
What is important is the BPO. The said the BPO came in at 71k. So 64k from 71 is not a huge discount. But I met the BPO who was a realtor, and pointed out everything that was wrong. It was a perfect SS house. Large, 40 year old house, with updates, in a nice blue collar neighborhood, that looked a little rough around the edges but could clean up for 5k. FMV will be 110k.
From my experience, they are very nice until they are assigned a specific rep. The very nice person is a customer service person. The rep is the one who is overworked and has to handle people who are getting foreclosed and yoyo investors all with the clock ticking.
Brenda
Very interesting...
This property has a repaired fair market value of about $130K, but it needs about 15K of repairs, plus all of the closing & holding costs, etc. Well, I'll give it a shot at $64,000 and see what happens. I'll be meeting the BPO early next week - extensive water damage, needs all new floor coverings...
HeatherK
Be pleasant but blunt with your BPO. Tell them what number you are trying to get. This is a hardship sell. Show them low comps in the area that support this. Point out all the damage and how your general contractor friend said it wold cost ???? to fix. The BPO is very important to be prepared.
Im trying to write a hardship letter for a short sale package and I dont know how to start it.
The homeowner shoudl write the letter in their own hand writing. It does not have to be long, but it should be long enough to tell the story. Do not use terrible grammar or english, but do not write like a scholar. Just tell the story in plain english. There should be a financial hardship due to death, health, medical bills, job loss, divorace, etc. Then they should also ask for help.
Dear National
I am writing you this letter to let you know why I am unable to make my mortgage payments. Last year little Johnny was diagnosis with .......
It is hard to write this letter and ask for your help. But I do need your help. The events of the last ____ have been so difficult. Please help me by working with ______ to sell me house. I am sorry that I am unable to make my mortgage payments.