Timeline
I have a home I'm interested in short saling. Market value is 125,000. They owe 74,000 1st mort and a 41,000 2nd . This isn't counting and late fees or the fact that they are behind more than a year on both payments. The 2nd is actually initiating the foreclosure. It's due to be sold at sherrif sale in Oct. It's a divorce , but the ex husband is willing to sign a quit claim deed. He just wants his name off the mortgages. She just wants the house sold so the foreclosure goes away. She will stay on and rent it back from me, probably lease option. What is the time line? Do I get her to sign the deed over to me "subject to" or initiate a purchase price with her and then try to sell it to the mortgage company. Sherrif has the appraisal at 120,000. Sale price (opening bid) 80,000.
Presumably, you'll want the second mortgagee to agree to a short sale.
Is the 'opening bid' set by statute? How did they arrive at the $80,000 opening bid? That wouldn't leave much for the second so I guess they'll be bidding at the sale.
My suggestion is that you are going to try to do a preforeclosure short sale, you should have a heart to heart with the second
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Sherrif sales inOhio (or at least incincinnati) are 2/3 of appraised value. That's where the 80,000 came from. What I'm confused about is why the 2nd is foreclosing after a little less than a year, while the 1st, which hasn't been paid in a year and a half, hasn't served papers yet. Are they just letting the 2nd do all the legal dirty work and then stepping in and taking most or all of the proceeds. Will it help my cause to take some pictures and get a hardship letter from the seller first or should I call them first, fax the loa, and feel them out ? Also, should I get the deed first or not ? That's really my first and most important question. I just want to know how to protect my interest in this. Incidentally, SS Pro, thanks for responding so quickly. I posted this question on another website days ago and haven't heard anything. You truly are a pro
I never advocate grabbing the deed... a contract and handshake works fine for me.
After FAXing the LOA, call the junior and request a short sale application... then devise a Proposal to accompany the application.
Incidently, quit claiming won't get the husband's name off the mortgage...
Thanks again for the info. I will do as you suggest and call the junior and request a short sale package. I know the quit claim won't remove the exes name from the mortgage. What I was trying to say was I would purchase the home and get his name off the mortgage that way if he will sign the quit claim before we begin dealing, assuming it's usually easier to deal with just one seller, especially in a divorce situation. The situation was ugly for a while, although tempers have cooled. Do you think 10% of the balance on the junior is a reasonable request ?
That won't even cover their legal fees...
I'd start with $10,000.
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