Short Sale & Seasoning
Im in the process of buying a property (short sale) with 35% equity in the property. I wanted to know if I can immediately resale the property? Any advice is appreciated.
Thanks
Derrick
Im in the process of buying a property (short sale) with 35% equity in the property. I wanted to know if I can immediately resale the property? Any advice is appreciated.
Thanks
Derrick
Yes,
You can sell or even refi immediatley after you purchase. My advice is to make sure that whoever is doing the loan is well versed in investment lending. If you have someone, I highly recommend that you refer the buyer so that you are assure of a smooth closing.
How are you purchasing the properties? Through a broker? Do they know that you are going to immediately sell? Brokers have recapture agreements with the lenders they sign clients up with. Normally a client must make 3-6 payments on the loan before it is paid off. If done before hand the broker could be required to pay back any premium given out by the lender. This could ultimately hurt the relationship of the broker, lender and you.
[addsig]
Thanks for the reply. Im still kinda confused. I dont want to be stuck with making 6 months worth of payments on a $350,000 house. I will check with the realtor Im using.
Derrick
You must be proactive in this... find a mortgage lender for a potential purchaser of your property...making sure that the lender will make a loan on a property that is being flipped.
Your buyer may have to provide more than one appraisal to his/her lender...
Ok, thanks
Just talk to you local RE agent and tell them you are looking at buying a house and would like to look over a blank house sales contract.
Get a paper copy and scan it into your computer to use for the future (PDF is best).
And/or check by searching online if your area contract is available.
The best thing to do is to be honest with the homewoenr. Always let them know that you will do your absolute best but cannot make any promises that the short sale will go through. Also, be sure to have them sign a "disclosure regarding real estate transaction" document. This document puts in writing that you cannot promise that the short sale will be approved and if the property forecloses while in the negotiating stage you as the investor will not be held liable.
as per HUD website..
Question 7: Recently, a client was approved for a PFS and now all he needs is the 90038 Form. He participated in the counseling session, but his ex-wife did not come. Her name is on the mortgage as well. He advised me that she is being uncooperative and he is worried that if she does not come in for her session that he will lose his home to foreclosure (He has an offer on the property now). I advised him that I could not sign off on the form unless his ex-wife participated as well. I did note that in the divorcee decree it states that the property must be sold. Please advise.
Answer: Form HUD-90038 declares, "EVERY participant in the Pre-foreclosure Sale procedure must sign a certification that he or she has received homeownership counseling before a proposed pre-foreclosure sale transaction can be approved."
"Participant(s)" is interpreted as all signers listed on the Mortgage. Perhaps Mrs. would cooperate enough to indicate in writing that she refused PFS counseling. Having this declaration in the file will protect the lender and the cooperating mortgagor.
THEREFORE, you may want to have the seller sign some sort of affidavit saying that counseling was offered to them, and outline all of the benefits they would receive from attending counseling but due to their present financial status they refused because it seemed hopeless..... get the signature and see what happens...
I am working on a SS with WF that is FHA. I am wondering what the general experience has been regarding SS where FHA loans are involved.
I have heard that they are easier inasmuch as they have to accept anything over 80% on these loans.
I have been doing SS fairly consistantly this year but this is the first FHA one for us.
What is the general experience of other investors regarding FHA & SS?
[addsig]
"I have heard that they are easier inasmuch as they have to accept anything over 80% on these loans."
They do not have to accept the short sale proposal at all. The mortgagor must be fully eligible for relief/consideration before they even look at the numbers.
By rule, if all other criteria is met... the mortgagee may accept net proceeds from 82% to 87% of the appraised value.
I have had a few FHA shorts where the loss mit rep provided the counseling to the homeowner over the phone. I usually let them know that it is taking sellers 4-6 weeks to get an appointment in our area (this is true) and ask for their suggestions. Once in awhile it works. I have a few sales held up by the counseling form right now. very frustrating........
~twilla
WOW am I understanding this right?
that if its a FHA loan your trying to get discounted they can make the owners take counseling?
If the homeowners refuse will it be a deal killer?
Also if a foreclosure date has been set and they make the homeowners take counseling will the lender tack on another payment or two if it takes the homeowners two months to complete the classes? Or am I totally out in left field with my questions today?
thanks
Homeowners can sign a waiver for counseling. Ask the lender for the waiver form. I just completed a FHA SS and the homeowner never had counseling -- he just signed a waiver.
What Bankruptcy is being filed? 7 or 13?
Thank you fellas
THIS IS AN AWESOME WEBSITE!!!
BBagnall
Whats the difference between chap 7 and 13?
michael
This site explains the new bankruptcy laws
http://www.bankruptcyaction.com/bankreform.htm
There is a Bankruptcies for Dummies (or Idiots) book which is very good. But still, you will want to wait until a new edition comes out based on the new bankruptcy laws.
You mention something about junior loans/liens being extinguished at the auction. Are all junior loans wiped clean in this case? All except the foreclosing senior lender?