All Forum Posts by: Mitch Freed

I have a short sale going on right now with OCWEN. I am in Portland so not too far away from you. Overall they aren't too easy to work with.

What part of the short sale process are you in? Has the package been put together yet and sent off to ocwen?

I submitted an offer last week and received a rejection without a counter this week. They are requesting that the debt be fully satisfied. This home has a roof that needs total replacement and interior repairs calculated at 40,000 at least. The full amount due is 220K and there is nobody in their right mind that would pay that much. OCWEN stated to me that they would take the home in REO and make the repairs themselves and then sell it....whatever.

The key with OCWEN is the BPO. That is all they care about. That will make or break your short sale. Get a low BPO and you win. You won't know what it is...but you will get a pretty good idea when they tell you that your offer and their idea of the market value aren't in the same ballpark...at leat that is what they told me.

My solution, challenge the BPO. I found out that when they did their BPO, their agent never went inside the home. I requested an interior inspection and they are complying. It can only help my case.

My contact at OCWEN..Natalie @ 561.682.8885. This may or may not help...she may not have the file. But since it is west coast, then she may. She is in Florida FYI.

Anthony,

Just because the homeowner has not been recorded in default doesn't mean anything. I have dealt with short sales where the homeowner hasn't paid their mortgage in 6 months and still hadn't received a default notice or notice of Trustees Sale.

All it typically takes is one late payment for the door to open up to a short sale.

I would ask the agent what contact, if any, they have had with the lenders. Usually if they are dropping the price below what is owed there has been some dialogue with the 1st mortgage. They have been advised to keep dropping the price to attract a written offer...once a written offer is received, thats when the ball gets rolling on the whole process.

They may have already sent in the hardship letter, financials, listing agreement etc...other times they wait to send all that in until they get an offer. It just depends on the bank.

I have a short sale going on with OCWEN right now as well. Current payoff on the loan is about 220K. The home needs at least 50K in repairs. Seller has vacated, roof is leaking and needs total replacement. Overall, nobody will finance this purchase so they are limited to a cash buyer.

I submitted my offer and package last week and got an answer this week. Pretty unbelievable turnaround time. I spoke with a girl named Natalie located in Florida at 561.682.8885. Her answer to me was that they were rejecting my offer without a counter. She informed me that OCWEN just made a business decision to stop doing short sales....riiiigggghht. She actually then went on to say that OCWEN would buy the home and do the repairs themselves....really.

I asked to speak with her boss, Anthony. She conferenced him in and they asked me the usual questions...why do you want the home so bad etc... pretty easy answers.

I then pulled out my ace...it turns out that when they sent out their agent to do the BPO, the agent never went inside the home. I explained to Anthony that of course their opinion on the value of the home doesnt match mine...they never went inside!! Thats where the bulk of the repairs are needed...mold, water damage, broken furnace etc...

They are now sending another agent out to do an interior inspection...great news for me because I have already completed a professional home inspection which that agent will receive when they pull the info on the home...it spotlights every single fault in the roof, foundation, mold area, illegal wiring, etc...

Anyways, that is where I am at with my OCWEN short sale. I'll keep y'all posted on the outcome.

I've got a situation with a pre-foreclosure that maybe somebody can help me with.

Auction Date = 5/19/08
Asking Price = $214,900

Owes Lender = 173,280
HOA Lien = $8,000 and rising

Listed on market for several months. Quite a few written offers. However, sales didn't go through becasue HOA won't let the condo be a rental. Apparently they are capped.

I have made contact with the HOA president, Property Management Company, and was finally forwarded to the attorney the HOA has retained to deal with the situation. Kind of a zoo.

I proposed the Lease Option vs. Rental...which they promptly shot down. I even proposed to pay a portion of the HOA lien, of which 100% would be lost via the foreclosure sale. Still no deal.

If I purchase the home and sell it on contract, I am positive the HOA couldn't do anything about that. I am wondering if anybody can provide any insight or paperwork on how a contract sale would work.

In other words, Buyer would pay me a down payment and I would finance the rest at a set interest rate with a 1 year balloon. I am unsure about the deed in this type of sale.

Thanks in advance.

It seems like it doesnt matter what city you live in...the news available to that city's inhabitants is always going to be uplifting and attractive...otherwise the morale as a whole would go down and who would invest?

For example, Portland gets rated as being one of the only states with rising numbers in sold prices among other positive things...I get a call from my buddy in Arizona asking me why Portland is the 4th worst in the nation for the same stuff...Propaganda my friend.

I don't see the lenders having much of an incentive to take a discount...mainly because the home has equity and isn't on the market and there seems to be quite a bit of time before the auction...the first may think they can do better than 45k.

I agree with eric, minimize your out of pocket expenses.

I would counter the 20k with a lower offer...but wouldn't wait 3 months to come to an agreement with the seller...as he does have other options..listing the home, selling to another investor etc...

One option would be to simply cash out the seller before somebody comes along and offers him more money. Forget the 20k deed transfer...do a simple purchase agreement for what he owes plus 20K (or less if you can get him to take less.) But that depends if you want to get financing to do this deal..and depends on the type of loans you would be making payments on if you just did a deed transfer.

Too many unknowns here...maybe elaborate?

Hi Eric,

You are correct, there aren't that many people that go to the courthouse to bid..and the pre-foreclosure short sales may play a factor, but there are other factors in play.

I go to the courthouse maybe once or twice a week if there is a really good deal, which is rare..I'm talking at least 80k up to 150k in equity in the home. It's rare, but they actually do happen more than you would think.

The investor that picks up 1 or 2 houses a year at auction doesn't have a chance to get a good deal that has equity like I talk about above...and that is because he/she will get squeezed out by a sort of "auction mafia." Portland's investor street gang.

I refrain from really going into detail because i'm afraid they will reach into my bank account and seize my assets...just kidding. But just for the sake of field research..I would recommend going to a couple auctions and watching what happens when there is a really good deal. (and bring cashiers checks...you may walk away with more money than you came with...)

I agree. working with realtors can be painful if they are not on your side. They usually come around when you explain to them that if you buy the house, they get a commission. If not, the home goes to auction and they get nothing. If you can close the deal and the realtor gets the commission, they will think of you first for future deals, and tell their co-workers to do the same.

Haha...agreed.

To clarify your question on what an "option" is...the basics are this:

1. Buyer pays seller non-refundable option money for the right to later purchase the property. This can be substantial or as little as $1.

2. The two parties either agree on a purchase price at the inception of the agreement...or the buyer may agree to pay FMV at the time the option is exercised. In a short sale situation the purchase price would be whatever the buyer agrees on with the lender. If they don't come to an agreement w/in the option term..then the agreement expires.

3. The terms are negotiable..could be 60 days...could be a year. In a foreclosure situation the term will be around 60 days more or less..due to the approaching auction date.

4. The buyer is not obligated to buy the property.

5. Nobody else can buy the property during the option period.