Short Sale
In the majority of situations, short sale approval is contingent upon a sale.. title would have to pass from one party to another.
Most short sales involve foreclosed mortgagors/sellers who will vacate the property in favor of the new owner.
If you want to seek a short 2nd, and have the (former) mortgagor remain in possession, I would think that they would have to be a tenant of the new owner.
There have been cases of a shortpayoff refi... but those are the exception rather the rule.
Has anyone short saled a second mortgage for the homeowner who wants to stay in the home? Is this possible, or is a short sale only worked out if the homeowner is selling the home?
Thank you, Janis
Quote:
On 2003-08-03 10:50, janis wrote:
Has anyone short saled a second mortgage for the homeowner who wants to stay in the home? Is this possible, or is a short sale only worked out if the homeowner is selling the home?
Thank you, Janis <IMG SRC="images/forum/smilies/icon_rolleyes.gif">
i would like to know that too hope someone answers
Short Sale Pro
Thank you. I think I'll take your word for it.
Janis
I would be very careful of letting the prior owners, who have already shown a tedency to default, to remain in the propety as your tenants. The may also have a "change of heart" after they closing and allege that you took unfair advantage of them in their time of need and want to rescind the sale. If they want to repurchase the property from you thats one thing. However, if they simply want to be tenants, I would help them find another place to live. Perhaps I'm being overly cautious but I've seen some stranger things happen. ,
Thanks jorge121,
Actually, I am tryng to work with the homeowner in getting a forebearance or some home owner's assistance worked out on their 1st and 2nd mortgage.
Janis
I have purchased second mortgages at a discount and taken over the Lender position. This is called "purchasing a discounted note". You get the SAME Short Sale results without having to jump through all the "short sale" hoops.
Bascially, you buy a note at a discount and then YOU BECOME THE LENDER. The homeowner will make his payments to YOU instead of the Lender.
The benefit is that you have many more options.
You can either make the first back payments (to protect your interest) and then foreclose getting either the FULL AMOUNT of the note back or the home.
You can have the owners sign the house over to you to keep you from foreclosing and getting their home, anyway. Then, you just forget about the note or pay yourself off when refinancing or reselling the property.
You can let the owners stay in the home and they will pay you the FULL AMOUNT (not the discounted amount) of the mortgage.
etc.
Hope This Helps.
Mrs. Meltzer
Mrs. Meltzer,
That is an interesting way of doing it. Thank you for your advice.
Janis
Mrs. Meltzer,
Question! If you are initially working with the homeowner to stay in their property, do you just take this task on or do you tell the homeowner what you are doing?
Or is this something you do if the homeowner is not taking care of business and not working with the lenders?
Janis
Mrs Meltzer,
If you buy the 2nd mortgage note , how do you take over the property when there is a first mortgage to deal with?
<Edited by LynLinz on Date 08/03/2003 ]</font>[ Edited by LynLinz on Date 08/03/2003 ]
Mrs Meltzer,
What happens if you buy a homeowners 2nd mortgage at a discount then they go through foreclosure on the 1st and file for bankruptcy? Do you lose it all?
Thanks
[ Edited by bergvw on Date 08/04/2003 ] [ Edited by bergvw on Date 08/04/2003 ]
So many questions!
Janis,
If I am initially working to keep the owners in the property, I do tell them because they will need to start sending the Second Mortgage payment to me.
This is an option I look at regardless if the homeowner is working with the lender.
LynLinz,
If the homeowner is delinquent on the first mortgage and currently IN FORECLOSURE. I purchase the Second Mortgage and in order to PROTECT MY POSITION, I will pay all the back payments of the first mortgage (not the full amount, just enough to make the mortgage current and in good standing). I then start the foreclosure for the full amount of the second mortgage, the amount I paid to the first mortgage to make it current, late fees, interest and all the foreclosing costs that will occur.
During the foreclosure sale, I will either get all of my money back OR I get the house.
BergVW,
It depends upon the state. If the first goes through foreclosure, then the second will be wiped out. I will lose my entire investment.
If the homeowners file Bankruptcy, I can get what is called a "Relief of Stay" and continue the foreclosure process.
Hope this Helps!
Mrs. Meltzer
Mrs Meltzer,
You are a creative investor. Thank you for the information. Very helpful.
Janis
Mrs Meltzer
After going over your responses about short sales again, I do have a couple of questions.
Please, if you have time,
What is generaly the percentage second mortgages will discount?
When you made the comment "You can have the owners sign the house over to you to keep you from foreclosing and getting their home". If they sign over the house to me, how is it signed over? What type of contract is used here?
Thank you again for your time.
Janis