Short Sales And Bankruptcy!..?
I am a real newbie to investing and I met a woman that might have a perfect case for a short sale.
She has had some serious hardships in her life the past year and can back it all up.
FHA Loan
Payoff is 135K
Comps (she tells me) are around 155K in the area and that doesn't seem unreasonable. Her house however does not show well. It was built in 1986 and needs a really good paint job, carpeting throughout the house, all the sliding door and bedroom doors need to be replaced. The garage has been converted to the living area, the pool is filthy and needs repair around the sides, and the above-ground jacuzzi is scary and covered by a gazebo that does not look stable.
She has filed Chapter 7 and thinking about filing Chapter 13.
Is it possible to do a short sale on an FHA loan with a filed chapter 7?
She is a really nice woman and I would love to help her out.
Any suggestions would be great. Thanks.
Most lenders will NOT negotiate with you while the property is in BK. To make matters worse, with a BK 7, the bank will seek to lift the stay on the house and immediately begin the foreclosure process on the house. Remember, if the foreclosure process was started BEFORE the BK was filed, once the 90 days has run, the lender does NOT have to file again but merely can conduct the sale. Your best bet is to find out the entire situation prior to spending alot of time on this . Ask a lot of questions.
Thank you for your message. I have found out a little more information since I posted. She found her paperwork and actually filed Chapter 13 and the foreclosure has been stopped.
Lisa
The 13 is a temporary solution to your clients problem. First of all, hopefully she has the income to pay the plan the trustee comes up with. She still has to continue to pay her mortgage and her arrearages in the plan the trustee devises. At least she has a friend in the business if she defaults!