Short Sale VS Discounted Paper
So. New question.
Are most lenders more willing to consider a Short Sale than selling their paper directly at a discount? If you've been following my first few posts here, I'm looking for a win-win solution to a foreclosure with four weeks left and not much equity. Plus, the owners want to move out yesterday.
I'm wondering if I can call the lender on the 1st and ask to buy their paper (possibly for a discount)? Is this even possible? Might it be quicker than a purchase transaction? Could I follow this up with a Deed-in-Lieu arrangement with the owners? Would the foreclosure period reset with the change in ownership of the paper ?
Thanks for your kind answers! :-?
According to my lawyer in TN, Buying the mortgage cancels the foreclosure; however a contract with the Home owner does nothing to stay the foreclosure. You must get the purchase accepted and completed before the foreclosure date or you may be holding the bag. I would not give any earnest or downpayment money until closing.
My opinion, with no available equity your best bet is the short sale thereby creating equity and not the mortgage purchase. If you buy the mortgage you still must pay for the foreclosure and time is money. In TN a minimum of another month before you can even take the property.
If they will work a short sale and you have the home owner locked down, you would probably be better off, note there are others with more experience than I so if they respond, consider what they say.
Well, just to give you oposite advice. ...
It may be that in TN selling the note causes the foreclosure to reset but that is not the rule most places as far as I know. Besides if you already have the deed-in-lieu agreement out of the owner what do you care what happens to the foreclosure case?
As to the lenders point of view as you get closer to the judgment it will, in my experience, get harder to get them to do either a short sale or a sale at a discount. What the bank is trying to do is eliminate uncertainty-- as the judgement date gets closer the uncertainty is less and they are therefore less willing to discount to avoid it.
So call 'em up. Ask the question. Either path gets you to the same destination.
"Would the foreclosure period reset with the change in ownership of the paper ?
Mortgages in foreclosure are assigned all the time... with no restarting of the foreclosure clock.
For a mortgagee to sell the mortgage via an assignment seems simple, but can be complex if it's part of a large pool of mortgages. In most cases, the mortgage loan servicer doesn't own the mortgage, and must follow a prescribed protocol to isolate the individual mortgage...
[addsig]