How do I keep the home owner from knowing what I'm offering the lender?

I’m doing a short sale for a man who is behind on his house payments on a house that was given him along with a mortgage on it! He is in trouble and only wants to get from underneath the pressure. He hasn’t filed income taxes for 3 years, but has decent income, but can’t possibly cover the mortgage on this house and his own house. The loan is with OCWEN and serviced by HomEq.
I told him I would give him some cleanup and moving money, but he wants to get more if I get a better deal than 80% of BPO.
Any ideas?

You have the leverage here. Use those negotiating skills, make sure he knows how damaging a foreclosure will be on his credit, and that it is also illegal to give the homeowner kickbacks.

Thanks for the comment!

Sounds like this homeowner would make a fabulous renter. That, by the way is the only thing you should promise him in writing. You can’t keep the offer price from his as he has to sign the PA. But, like Gwhiz said, you hold all the cards in this deal. So what if you are getting a killer deal, you deserve it for being a saavy investor.

Be up front with the homeowner and tell him that the only way you are gonig way you’re going to get in on this property and possibly allow him to stay in it and rent or have enough to move and rent somewhere else is if you are getting the best deal possible.

The home owner must approve the short sale. They are the owners of the property when the short sale is being done. In addition, when a bank does a short sale, they will send the seller a 1099 for money lost.

Hope this helps,

It really doesn’t make any difference if he knows or not. When an owner gets involved in a short sale there is no way he can make any money out of the transaction. He can’t make the payments - how can he make a profit. I would just tell him that it would be fraud if he made any money out of this deal.