FMV or Loan Balance?

i have a question i hope you guys can help me. I took a seminar on foreclosures and they taught me to deduct all the arreages, utilities, lawyer fees…etc…; from the loan balance; i am now doing business with a partner and he is howing me to subtract all those things from the FMV. He is a very smart man; he’s been doing this for a couple of years, but im getting confused. If someone can help i’ll greatly appreciate it.



I agree with your friend, subtract from FMV. What would subtracting from the loan balance do for you? You could have an $80K loan on a $100K house or a $20 loan on a $100K house. Subtracting fees from the loan balance doesn’t do anything I can see.

Actually, neither. The bank will appraise property, then negioate sale from appraised price.

For FHA loans bank must net 82%. Commissions, buyer’s closing costs are on top of the 82%.

For example, house appraises at 100k, commissions are 6%, and buyer wants 3% cc, the lowest offer bank will accept is 91%, or 91k, keeping the math simple.


What are you trying to determine by deducting the arrearages, etc.?

Cash requirement?

Sales proceeds?