All Forum Posts by: Mitch Freed

You will need to submit proof to the negotiator in the form of an appraisal or BPO to challenge their value. This is usually how Litton operates. The negotiator has a supervisor and cannot submit your offer for approval without something to back it up.

The tech can only tell you what the computer screen says they can tell you. So if the BPO price range is above your offer...then you either need to raise your offer or challenge the BPO.

What exactly was the seasoning requirement?

Until you get the approval on the first, you can lay off the 2nd lienholder.

Once you and the 1st agree on a price they will send the file to a closer. At that point you have quite a bit of leverage on the 2nd mortgage because you will have, in hand, an approved payoff from the first.

You don't need another BPO from Chase...it sounds like the first one they did was a drive by / check for occupancy. That being said, when a bank tells you they have done a BPO, you must request that an Interior inspection be done. Junior lienholders will typically only do an exterior BPO and therefore the values are off.

So it looks like your next step is to hammer the first mortgage on the approved price. This can be done several ways: Get a home inspection and use that to justify your offer...or if you want to spend a bit more money, order an appraisal. Make sure you are at the house with the appraiser, bring him/her the comps you would like them to use and if you have the home inspection done already, make that available as well.

Regarding excess funds in closing...be careful here...most approval letters specifically state that any excess funds transacted are the property of the lender in first position. Some lenders will just give you an approved payoff, wiring instructions, and thats it.

Overall, get that approval from the first and then go after the 2nd.

Also, I may have missed it in the previous posts, but is there an auction date assigned?

Hi Ted,

Thank you for getting back to me, I apologize for the delayed response. Yeah Wells Fargo denied my request for a partial lien release. They didn't want to see an appraisal, nothing. The investor simply has a policy that doesn't allow for partial releases unless there is some sort of extenuating circumstance I guess.

Whatever, I ended up paying off the mtg in the interest of closing on time with my buyer.

I purcased a property Subject To an underlying mortgage and after the fact realized that I had a 2500 sq ft buildable lot. I have gone through all the necessary steps with the city and county to spin off the lot, re-established the property line, got a new Tax ID for the lot etc...

The underlying mortgage is being serviced by ASC and the beneficiary is Wells...i have been making the payments. The borrower is still the lady who i purchased it from as I bought "Subject To."

I do have authorization to speak to the bank regarding the loan...my question is, how to I go about getting them to release the new lot from the existing 80K lien on the house. I do not see a problem as I have an appraisal showing value for the house at 140K. So the reduction in value does not worry me.

I have found a buyer for the lot so I would like to get the lien released from it so I can complete the sale.

I am wondering what other experiences you have all had here.

Thanks in advance.

You've got a good strategy there...timing is one of the most difficult things to master in these situations.

The option allows you to do the following...contract your end buyer subject to you exercising your option...not subject to the short sale being completed. This way you tell the end buyer that you will be exercising your option within 60 days or whenever...that way you have time to finish the negotiations, get your approved price...without the end buyer suspecting that you might not actually be able to close this deal.

Since you got the option...when you market to an end buyer...the only condition on them buying from you is you exercising your right to purchase...not the bank approving your short sale offer.

The tenant can't get kicked out at a moments notice if there is no auction date assigned and the lease is short term or month to month.

I agree, there are wrong ways to do this...but there is subsequently a right way. Of course, the tenant always has the option, in any lease agreement, to stop paying rent. In these cases I would probably not pursue an eviction or attempt to ruin that tenants credit history or make their life difficult...too much time wasted...

but at least when the BPO is done...the agent will note that there are non paying tenants in the house...who probably didn't grant access...therefore who knows what the interior will look like...result being a lower offer and a better short sale negotation.

In the end the tenant will have probably lived in the house for a few months rent free and the investor will have negotiated a better price.

But this doesn't forgive or justify the default on the rental obligation...the market rent of the house wasn't automatically reduced to zero because the mortgage went unpaid.

I love the Sub 2 method...well said Michael.

Here is another spin...if the interest rate isn't to your liking and the principal balance is just a tad bit high..or the term isn't 30 years...work with the seller to negotiate a loan mod with the lender and then take title sub 2 after the loan mod goes through.

I'm sorry but if contracts aren't worth they paper they are written on then why do we use them?

And from my experience negotiating shorts and the investors I know here in Oregon...we close our deals and our contracts are worth more than the paper they are written on.

Once again, what difference does it make to the tenant where the money goes...no matter where they live...they have to pay rent!!!!

No problem! Go ahead and use a standard purchase and sales with your end buyer...unless of course you plan to sell to them on contract.

Your ideal situation will be a quick flip...or 90 days if they are FHA and you can hold the property for a bit...so a standard purchase and sales agreement is what you want.

Chances are they will have an agent searching for them...which is no problem..in that case the agent will handle all the paperwork. The only issue there is you gotta pay them commission...so figure in for that in your short sale negotiation when you submit your offer to the bank...always plan for the worst possible situation that has you paying all sorts of agent fees, closing costs, back due taxes when you are submitting your offer....this way when you find your end buyer and they ask you to pay their closing costs, and they've got an agent...you have already figured in for this stuff and you don't have to spend a bunch of time negotiating and possibly losing your end buyer.