Will A Short Sale Be Possible Here?
Seller refinanced their Northern Virginia home at the peak of the bubble to get funds to build a new home. During build process the old house was neglected, as were the dogs inside. damage to walls, floors, doors. Heavy smokers.
Seller has final financing in place on the new house but cannot list the old house with a realtor (no equity since market in area dropped 10%).
Seller was late in paying first and second mortgages several times in the past months, damaging their credit.
Main mortgage refied 2/06 is $305,000. at 8.3%
Second taken 2/06 is $25,000 at 9.9%
Current value: $300K as is;
Should be $348K after $10K repairs.
Sellers say June is their last possible bank payment.
Hardship: They cannot pay for two houses, cannot rent the old one for enough, cannot fix it up, cannot sell it for enough to pay off mortgages.
Will banks discount the loans on this basis?
What do you think?
Any suggestions for structuring the deal?
Thanks for your help.
Most lenders only short sale properties that are primary residences also, it has to be 31 days delinquent.