Can I get a short sale package into the bank 11 days before the courthouse sale, and will that stop the sale.
Hi,
Theoretically you can submit a short sale package up to day of sale! However whether the lender will except it and stop the sale depends on whether at 11 days before there is nothing in state law prohibiting it at such late notice or whether the property has PMI that will pay the lender regardless?
Good luck,
GR
Check with your state if the defendant is allowed to file an adjournment. Here in NJ, the defendant is allowed to file 2 adjournments worth 2 weeks each so a total of 4 weeks/30 days. If you can, this will buy you time to submit your short sale package.
joolkano is correct. also, i would check with the lender to see if they would accept the short sale documents. some lenders need 30 days others will accept it the day of.
ryan
First Off I wanna thank u guys for responding.
There is another issue that I forgot to include, and that is, the second mortgage is foreclosing, how can I go about handling this?
Here in NJ I have done several shorts sales with a secong mortgage in place. As for the 11 days till Sheriff’s Sale, well thats up to the bank. Some will stay the Sheriff’s Sale and allow the negotiations to continue. As per the second, if they are in 2nd possition and foreclose, they will not get a thing. If you can get the first to talk, usually they will permit about $2,000 to payoff the second. When I file the authorization I ask for a stay of the sale and payoff figures. Hope this helps.
From my experience, if the 2nd mortgagee is foreclosing it means it is worth it for them to protect their position and absorb the first which means there’s equity in the property or something of value.
When the 2nd mortgagee forecloses they have to absorb the payoff on the 1st. If the 1st is say $300K and the 2nd is $100K and the value of the house is $600K, it is worth it for the 2nd to pursue foreclosure and protect their position. If they get the property at the sheriff’s sale, the sale would be subject to paying off the 1st mortgagee and any other outstanding liens such taxes, water, sewer, etc…
A short is going to be difficult in this scenario. The 1st mortgagee most likely will not accept a short because if they simply let it go to foreclosure, they will get paid everything they’re owed by the 2nd mortgagee. The 2nd mortgagee is foreclosing because they believe the property is not upside down (worth more than all the loans combined) so they would be hesitant to take a discount. The only way I see them considering a discount is if the owner files for bankruptcy which stops and delays everything. Speak to a knowledgeable attorney if going this route.
But, you may want to try this potential play for your deal. Buy the 2nd mortgage note at a discount then take the 1st “Subject to” by reinstating the loan. If the rental on the property is more than the payment on the 1st you can create some cash flow for yourself. Or simply sell the house, of course for more than the 1st mortgage+your costs to purchase the 2nd mortgage.
It’s also possible that the homeowner just stopped paying the second mortgage before they stopped paying the first. Therefore the second may just be further ahead in the foreclosure process. It doesn’t necessarily mean there’s equity. Do you know if the first mortgage is also in arrears? Also, in what state is this property located? Some banks will negotiate late in the foreclosure process if the redemption period is long.
Im NYC, the property is in Far Rockway, NY…To summarize, the home owner went to court, and the sale of the house was cancelled, so now the bank is talking, and we are in short sale process, so all is good so far…Thank you all for your valued information!