I have a deal that is just about to close, the homeowner is going to file bankruptcy pretty soon. Loss mit told me that bk would cancel the short sale. Does anyone have any experience with this? I thought it might give me some leverage in negotiation, being that the countrywide would have to carry the home as it goes through foreclosure.
I would call a local Bankruptcy Lawyer and take him to lunch. Make sure it is a credible attorney but take him to lunch and ask questions. I would think how it affects the foreclosure vary’s from state to state, maybe not though.
I also would think that Countrywide would want to get rid of it now rather than hold it like you said but hey, nothing would suprise me with short sales anymore.
It would have no leverage what so ever in negotiations. I hear the threat all day- I tell the agent/investor to let me know if the borrower files so I can close the file out. Your negotiator doesn’t have time to play games with things like the buyer is threatening to walk or borrower going to file BK. Most of the time I’m glad when a borrower files because this is one less file I have to worry about.
If a BK is filed then after it’s released the SPO process can begin all over- borrower will most likely have an even larger 1099 to worry about (only really matters for HELOC’s or Investment properties now a days, though)
Anyway, just a thought…
So if I have a client that has seeked counsel with a BK lawyer but has not officially filed (because of a lack of funds to pay the lawyer) should I still put in a short sale offer to the lender?