Upside down seller mortgage assistance form from bank

[Alex Shin]

Hi Everybody,

I have a seller who is severely upside down with the bank. He is on title for the property, however, is not on the mortgage. He is the main point of contact with the bank, and has had multiple conversations with them without the mortgage holder. Current mortgage holder doesn't want anything to do with the property. My seller received a "Request for Mortgage Assistance" from the first position lien holder. The plan is to request the bank to reduce the mortgage amount to 225K from 600K.

Do you think it'd be best to submit the form with or without a LOI for that amount?

Any constructive feedback will be helpful if you have any experience handling this lead.

And if you connect me to a good real estate attorney in Los Angeles, that'd be highly appreciated as well.

Owes 600k in mortgage, as-is value around 425K, ARV 510K

[Joe Homs]

@Alex Shin are we headed back to short sales?

I have a seller who is severely upside down with the bank. He is on title for the property, however, is not on the mortgage.

"This is rare, but does happen.  Who is on the loan?  I hope you know that person is responsible and it will affect his credit the most."

He is the main point of contact with the bank, and has had multiple conversations with them without the mortgage holder.

"Again, this is rare as the bank will not discuss the loan without the permission of the person on the loan."

Current mortgage holder doesn't want anything to do with the property. My seller received a "Request for Mortgage Assistance" from the first position lien holder. The plan is to request the bank to reduce the mortgage amount to 225K from 600K.

"I wish you luck in the reduction request as this will probably never happen.  It did not happen very often 10 years ago and there is no incentive from the bank to do this now."

Do you think it'd be best to submit the form with or without a LOI for that amount?

"Try it as all they can say is NO."

Any constructive feedback will be helpful if you have any experience handling this lead.

"What you are dealing with is a short sale.  Only licensed real estate agents are allowed to deal with short sales as they deal directly with bank and that is their requirement.  Please however, contact an experience real estate agent that knows how to negotiate short sales.  If the current owner just wants to walk away he can.  It will be the mortgage holder who suffers the most."

And if you connect me to a good real estate attorney in Los Angeles, that'd be highly appreciated as well.

"You do not need an attorney, unless you want to stall the pending foreclosure with a bankruptcy.  This will only postpone it for several month, but the bank will eventually pull it out of bankruptcy."

Good investing...

Owes 600k in mortgage, as-is value around 425K, ARV 510K