Advice Appreciated!

Foreclosures, Short Sales, Tax Foreclosures
1

Hello everyone! Happy Friday!
Okay i have a new deal that I am debating on pursuing…

HO is 4 mnths behind on payments as well as upside down in there mortgage. 1st owes 465k (loan amount was 430k) and second is a heloc for 14k. There is a tax lien of about 2k. Couple is going through divorce, wife has cancer and is on disability, they cant afford the payments as-is and their mortgage is set to adjust to a higher payment again soon. Im guessing the home is worth about 467k and was hoping to do a SS for 382k (82% of the 1st and 1k to payoff the second). Both loans are through WAMU. Home is fully remodeled inside- new pipes, new kitchen but outside needs work and the home is in a lower income area. Closest comp was for 550k and was sold in 8/07 but that home was in better condition and had more sqft. I saw at least 3 homes that looked for sale and possibly abandoned on the same street. The husband is the only one on the mortgage, but his wife and her mother are both on title along with him. Wife wants to quitclaim her mother off of the title (mother put 100k down for them to buy home). I am thinking since Wife is not on the mortgage she could be quitclaimed off as well. My exit strategy would be to wholesale it out as-is(Using Double/Simultaneous Close). I know WAMU doesnt have the best reputation for cooperating with short sales and being that this is my first deal that I am pursuing alone I was hoping some of you wonderful people out there could give me your advice on whether or not this is a good SS to attempt…
Thank you in advance for your help! :help

2

Aww come on no help? pleazzzzeeee???

3

A few thoughts:

  • Be sure on your comps before pursuing - what is the deal with the three other houses
  • Estimate repairs
  • Quit claim can be achieved whether on mortgage or not - triggering due on sale clause means virtually nothing at this point
  • I would think you need a much better price than $382k to turn the house quickly but that is just a guess based on your stated ARV

Best of luck.

4

on that first i’d be paying only 82% of BPO tops. bear in mind that at
times, you can’t get the BPO low enough to make the numbers work.
harriet(fl)

5

All titled owners have to participate in the sale. Even though only one is on the mortgage, you have three owners to deal with. The mother has $100K invested. She may want her money back before she will agree to sign over her share of the title.

The daughter can not quit claim her mother off the title. The mother can voluntarily sign a quit claim deed that transfers her interest to the daughter and son-in-law, but the daughter can not unilaterally remove her mother’s name from the deed without commiting forgery.

6

Both notes (1st and HELOC) with same lender: Are they really going to discount the HELOC from $14k to $1k? I would expect instead that they would accept 82% of the aggregate of both notes.

Double-close: My understanding is that lenders won’t go for this in a short sale.

Numbers sounds pretty tight to me. Don’t be afraid to walk if your numbers don’t work.

7

How will the lender know it is a double close? What happens in the second sale is none of their business, as long as they are paid.

I understand that lenders will typically not allow an assignment of contract, which is different.