Can You Short If They Are In Bankruptcy
I need some guidance. I am somewhat versed in shorting regular properties with multiple liens. But, I recently got a call from a motivated seller who is in bankruptcy. My question is...can I short this place? And if so, what are the steps?
Do I get an authorization to release information form filled out towards the trustee? Does the trustee have to fill out the authorization? Where do I go? And what do I do?
Any advice would be appreciated...I've already read the book, and heven't read anything in regards to bankruptcy.
tough row to hoe
The Homeowner/mortgagor can't do much, if anything, without the explicit permission from the Trustee.
in the majority of shorts involving BNK, the mortgagee won't consider anything until/unless the Trustee has abandoned it's interest in the property and/or the BNK dismissed.
Just bear in mind that it's the trustee's job to maximize payments to creditors.
If there is equity in the house... he'll want it to pay the creditors.
Check first and see if the smarty homeowner now in bankruptcy has a Homestead filed on the property which of course predates the BK.
Thats the pivot. Oh our dear old Uncle Sam for an Uncle he sure acts like a father.
I am sure you can look up the rest. If not post away.
da Lucius
I am very green!! So what is a Homestead? Where does one go to find/post one? How does it hinder the process?
So, would i have to, most likley, pay up front the backpayments to all creditors (once I spoke with the trustee) bringing debts current, and then move into shorting the principals of the mortgage by speaking with the mortgage company's loss mitigation department (a la your garden variety short sale?)
It sounds like the HO is pretty much out of the picture...besides getting his permission to deal with the trustee. Would that be more or less true?