Short Sale/ Wholesale question

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Short Sale/ Wholesale question

Sean Davis
Lawton, OK · Member since 2008 · 47 posts · 0 votes

Okay here's the deal. I got a lead from some flyers I put out. There's a lady with vacant home and her husband just died about 6 months ago. She can't handle paying for the vacant home and her new place. She informed me that it's going to sherrif's auction in about two weeks. The Mortgage company told her that they would accept a short sale as long as there has been a sign outside of the property for atleast 90 days and it wouldn't sell (I'm not sure what that's all about). Here are the numbers...

ARV around $95,000

Loan Balance $95,000

As-Is about $85-$90,000 (they got taken by a pretty dirty investor... needed repairs were ignored/hidden only to surface later)

I'm assuming the way to go would be a short sale since the mortgage company said they would do it. Do I just need to contact the mortgage company and make an offer? Why would they want to short sale it over auctioning it off? Will they need proof of funds or will they allow me to assign it to an end-buyer?

I want to help the lady out but if there's nothing I can do then there's nothing I can do. Let me know if guys can help. Thanks!

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  • Account Closed
    Real Estate Investor · London · Member since 2008 · 3k+ posts · 74 votes
    19y

    Sean,

    1. The sign requirement is a way to confirm that the property has been on the market in a public way. That if there were buyers at the amount owed they would have come forward. Holding a property off the market to make it look like there is no demand is what they want to head off.

    2. They will not talk to you directly unless there is a release from the owner. Privacy issues that they must legally deal with.

    3. They will take a short sale rather than an auction if they need to get the asset sold rather than having it come back onto their books. Or the short sale amount plus costs is greater money to the bank compared to an auction and all the costs/delays that implies. The lender has business rules and they operate by them. The exact logic will vary from one lender to another.

    John Corey

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  • Sean Davis
    OP
    Lawton, OK · Member since 2008 · 47 posts · 0 votes
    19y

    You always have great answers John... thanks. As far as getting a release from the owner... is that a legal document, word of mouth, legal action?

    The sign in the yard makes sense now. I doubt they will even consider the short sale with me because she couldn't get a realtor to list the house for some odd reason. So there has been no sign and they specifically told her to have the house on the market for 90 days.

    It looks like I might not be able to help her... thanks for the advice though!

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  • Account Closed
    Real Estate Investor · London · Member since 2008 · 3k+ posts · 74 votes
    19y

    Release - A legal document that the owner/borrower signs indicating that you have their permission to speak with the lender concerning the borrower's private details.

    The lender will want to see a copy of the document before they speak with you concerning the property. Likely they will not even confirm if they have taken any action even thought there will be a legal notice filed to start the foreclosure process.

    John Corey

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  • Sean Davis
    OP
    Lawton, OK · Member since 2008 · 47 posts · 0 votes
    19y

    Well I guess she's kinda SOL. I hate it because she's a really nice lady. She got screwed when she bought it from a real estate investor. That investors business has been shut down since then because of numerous lawsuits. Now that investor is a real estate agent. That agent is waiting for it to go to the auction so they can buy it back... but they won't help her sell it now. Dirty.

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  • N/A N/A
    Member since 2008 · 15 posts · 0 votes
    19y

    You have to get authorisation to release the information from the owner and fax it to the bank.
    Than call to loss mitigation department and ask them what docs they need for shortsale.
    They are pretty much the same for each bank:
    1. sales contract
    2. two last month bank statements of the owner
    3 2 last years tax papers of the owner
    4 hardship letter
    5 financial statment from the owner
    6 your POF
    7 letter of explanation if you do it withot realtor that the property is for sale by owner
    You can see the short sale process description in HOMEQ site under loss mitigation.
    I can give you loss mitigation department most of the banks if you will give me the name of the bank

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  • Sean Davis
    OP
    Lawton, OK · Member since 2008 · 47 posts · 0 votes
    19y
    Originally posted by "REOpoolsinvestor":
    You have to get authorisation to release the information from the owner and fax it to the bank.
    Than call to loss mitigation department and ask them what docs they need for shortsale.
    They are pretty much the same for each bank:
    1. sales contract
    2. two last month bank statements of the owner
    3 2 last years tax papers of the owner
    4 hardship letter
    5 financial statment from the owner
    6 your POF
    7 letter of explanation if you do it withot realtor that the property is for sale by owner
    You can see the short sale process description in HOMEQ site under loss mitigation.
    I can give you loss mitigation department most of the banks if you will give me the name of the bank

    It's no big deal anymore but thanks! She called me too late... the house isn't hers anymore.

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