Strange Deal- Is this a Short Sale or???

[Jeff L.]

This would be my first deal and I think this is the correct place to post, if not can the mods please move?

I need to know if this should be approached as a short sale or approach in another direction. Here is the situation:

There is a boarded up home in my neighborhood that Ive had my eye on for 2 years, long before I found BP. There are stickers in the window from a Mortgage Preservation Service which, from my limited experience meant it was an REO. After asking around the neighborhood with no luck I hit the courthouse and found it in fact was NOT bank owned. After having no luck getting the owners phone number I drove to Chapel Hill and knocked on his door.

He and I hit it off and he invted me in and we spoke for over an hour! And this is what I found:

- He is 73 and in deteriorating health.

- He is willing and motivated to sell. In his own words, he said "**** Chase, I'm not going to be around much longer."

- He said the property went to auction in April 2013 but had no bids. Here is the strange part, instead of it reverting to an REO, he said the bank withdrew the foreclosure and its still in his name! Im a newbie but Ive never heard of this happening. Can anyone shed some light on what might be going on?

-He said he liked me and would do whatever he could to help in the sale of the property but He said he is NOT willing to speak with Chase Mortgage (im still not sure why).

-He gave be a statement from Chase showing the loan balance to be around $100,000. This statement was over 3 years ago.

-He said he thinks the payoff would be around $125,000 now.

- According to my limited experience and research I think the ARV should be around $168,000 conservatively and would need about $25k in repairs.

Whats my next step? Find a RE Agent to call Chase? Make an offer to owner and then give to chase?

The owner will be leaving this Wednesday for California for 2 weeks so Id like to act quickly!!!

ANY help is much appreciated!!

Thanks all,
Jeff

[Account Closed]

Originally posted by Wayne Brooks:

It will be a short sale. If the owner won't cooperate (doesn't necessarily have to talk to Chase) by providing tax returns, bank statements, financial statements, etc. then a short sale can Not be accomplished.
If what you say is true about the auction, but Chase not taking title, there might be something. I assume they didn't take title (here they would have to pay a doc stamp fee to take title) because they saw little value, and didn't want the liability....Maybe. I'd get the 3rd party authorization, available online at their website, and open up dialogue. Thisis definitely a long shot and I've never seen it successfully done, but if they simply didn't want the property, maybe they're willing to do something without going the REO route.

Wayne, Wayne, Wayne. I did a short sale without the participation of the borrower last December. No tax returns, no income verification, no hardship qualification. And everyone here on BP said it couldn't be done. The agents who work short sales were especially vehement in their insistence that it couldn't be done. :)

I got the deed and an authorization to release from the owner for $250. Then, as the owner, I worked with HSBC to discount the payoff from $275 to $80K. I'm sending out paperwork to an owner on another one today. Pretty much exactly the same situation as the last one. Owner files BK, moves out and then finds out 2 years later they still own the property. Not saying it can be done in the OP's situation, but it's an angle to consider when the borrower won't/can't cooperate on a short sale.

Jeff Lee IMO, you need a title report before you go any further. You need to know if there are any other liens and debts are against the property and the owner. And you need to make sure of that the borrower is legal owner of record. It could be that the debt against the property was the reason Chase didn't take title. Do you know if the borrower filed bankruptcy?