Shorting A 2nd Mortgage
I am working with a homeowner who is 4 months behind on his 1st and 6 months behind on his 2nd. He owes 150k and 70k respectively. House is worth at least 260k. Why would the 2nd short sale with this much equity in the house? I need to call them today and am unsure how to approach the situation. Any help would be greatly appreciated. Thanks! 
I have a similar question that is also waiting for someone to answer. I understand it's a less formal affair than shorting the 1st. From what I've learned, you just call them up and make them an offer. Just wish I had more detail for you.
Good luck.
Look here:
http://www.thecreativeinvestor.com/ViewTopic14069-18.html
I have an even better one for you swetback. I let them make the offer, and it was 20k on a 70k face value note. We are buying the note and taking our chances . If they go to auction we can bid up the price to 230k and make 50k. If the homeowner deals with us directly (not a foregone conclusion) then we will do quite well there too. If another investor gets involved ( as the homeowner insinuated) we will still make 50k. If homeowner reinstates then we will collect 10k upfront and $875 per month. I would call this a pretty good situation. We hope. Any holes in this hypothesis?
I don't see much chance of it going to auction. The homeowner would get nothing. You could at least give him a bill of sale for his personal items if he deeds you the house. Of course with that much equity he is hoping for another buyer to come along before auction. If the house is really worth what you say it should sell quickly at at a reduced price and you would still make a nice profit. I would try to entice the homeowner with a bill of sale (contingent on you selling the house) amount that he could live with, and get the deed.
Quote:
On 2003-10-17 01:01, AngelNDSkies wrote:
I have an even better one for you swetback. I let them make the offer, and it was 20k on a 70k face value note. We are buying the note and taking our chances . If they go to auction we can bid up the price to 230k and make 50k. If the homeowner deals with us directly (not a foregone conclusion) then we will do quite well there too. If another investor gets involved ( as the homeowner insinuated) we will still make 50k. If homeowner reinstates then we will collect 10k upfront and $875 per month. I would call this a pretty good situation. We hope. Any holes in this hypothesis?
...and good job on puchasing the second at a nice discount!
Thanks swetbak. I met with the homeowner last night and he did not sign the contract. He was under the illusion that we would just write him a check for his equity. I told him he would get paid when we got paid, but he didn't seem to like that answer very much. I think he is going to get another investor involved. That's why I decided to buy the 2nd note.
I called the 2nd mortgage holder for the house I'm trying to ss. I got thru to the loss mitigation dept. (Home Eq). A couple of things I found interesting:
They wouldn't discuss any details of the 2nd unless I provided "release of auth.", and the owners personal information; even though the loan was in default and I was interested in making an offer on their loan.
Then she wanted all the details on the 1st. (payoff, attorney who is handling the foreclosure, and the date of sale).
After I made them an offer, she said she would need to send out a ss package to be filled out.... I didn't think that you needed to do this with a 2nd.
Did I make a mistake by saying that I was working for the seller? Should I have just told her from the start that I had the deed and I'm not going to fill out any ss package?
Thoughts?