Short Sale On 2nd Mortgage
I have a question for experienced short salers. The subject property is worth 260K. 1st mortgage of 150k, 2nd of 70k. Net equity of 40k. Obviously, if this goes to auction then the 2nd's position is pretty well covered, in fact they might show up themselves to make sure of it. The question is, what would be their reason to accept a short sale? Any ideas would be greatly appreciated. 
Hi AngelNDSkies,
You are right, the 2nd would certainly show up to save their investment on this one. However, the 2nd may be overloaded with NOD's and may be open to a quick release on this one so that they would not have to take it back and resell it. The 1st of course wouldn't SS, but I would still try to get the 2nd to SS. Your best bet is to meet the BPO realtor out at the property and show evidence of why you think the property is worth considerably less. If you get a low BPO back, it puts you in great bargaining power. Now the 2nd probably wont discount greatly, but even if they agreed to only $50,000, you just made yourself an extra $20,000, just for asking.
So in summary, the 2nd may be carrying a lot of defaulted notes right now, and to save them from having to dish out the cash to the first and then the hassel to resell, they may consider a discount in your favor.
2nd mortgages are my favorite to discount! Best of Success!
BAMZ
Let me ask a very stupid one. I saw a listing. It says at the bottom 'must be approved for short sale'. What does that mean?
Was it an MLS listing or where did you see this?
BAMZ
It was MLS. My realtor emailed to me.
Hi ahmedmu,
It appears that this property is already in foreclosure. The loan is probably upside down and the realtor knows that the only way to make this sale is to have the bank(S) take a discount on the amount owed. The realtor may have already done the leg work to get the process of the Short Sale Started. It may be a good idea to call your realtor for comps on the property.
Are you looking for a home for yourself or for an investment?
BAMZ
Second agreed to 20k. We are buying the note tomorrow. 50k with just one phone call. Is this a great business or what?
I really didn't understand the nature of this transaction, what exactly you did to make money here. Can someone break it down for me a little bit? I appreciate your time.
Hi AngelNDSkies,
Wow! That is fantastic, good job! You just never know what you will get for the asking, right?
Ahmedmu, in the transaction about, AngelNDSkies has asked the 2nd mortgage to take a discount on their note instead of losing it completely at the auction, or having to fuss with buying the property themselves at auction and then having to resell it.
Thanks for sharing your success. Get your on this one, then go out and find another one!
BAMZ
Thanks BAMZ. It's not in the bank yet. We still have some work to do, but I appreciate your enthusiasm.
I don't understand. What exactly do you get, and what are you liable for in acquiring this discounted 2nd?
hey makingaliving,
buy discounting or aka short selling the 2nd mortgage from $70k to $20k, you jus basically gave yourself a $50k check literally. what this does is by negotiating the total amount owed to the 2nd lien, the 2nd mortgagee is taking back less than is originally owed, but the house itself is still worth the original amount... so when she goes to sell the house, she has all that equity to cash out when a new buyer comes in with a new loan... i think i explained that ok... dunno...
BTW how is business there in atlanta??? i'm planning on relocating to the bufurd area next year, i'd like to know a heads up down there.
Also can someone help me out where i could find some of the legal forms to use when getting the deed and stuff.. cuz i have NO forms at all... hehe i kno that they have to be state legal and all but some forms and stuff would be great. thx
[addsig]