How would you handle this potenial deal

OK… Here’s the deal.

1st mortgage with Fremont =120k
2nd With Ocwen =30k
Repairs = less than 2k
After Repair Value =160k

As you can see the only way to make this profitable is with a short sale. The homeowner has not made a payment since September and Fremont is foreclosing. I believe Fremont is still the holder of both loans but Ocwen is just servicing the 2nd. I gather this by the fact that Fremont originated both loans and on the notice of Lis Pendends they, Fremont, are listed in both the Plaintiff and Defendants sections of the suit. Ocwen has charged off the loan but wants money to do an appraisal. The home is in very good shape and in a good area.

It was hard for the realtor to even find good comps that support my offer (110k) to Fremont. I would be very happy if Ocwen took 1k and Fremont took a 10% hit on what they loaned out. If Fremont just does a drive by BPO they MIGHT accept my offer. If they go inside I’m sunk. It might be the same with Ocwen. I considered trying to short the 2nd and picking up the 1st Sub-2 but the homeowner is 7k behind and the interest rate is much to high.

This would be a flip that I hope to gross at least 30k from. Any suggestions on the best/better way to handle this.

Bovine: How was Fremont to work with? Did this short sale work out successfully? I have a SS to submit and Fremont is the holder of both 1st and 2nd. Just curious as to how they were to work with. Thanks.

Your Mileage May Vary, but for me they were very easy to deal with. It took less than a month start to finish. My rep always called me back and responded with an answer within a couple of hours. Be prepared to fax and refax certain documents to them, most lenders seem to lose pages all the time. They wound up accepting a 20% discount, which worked for me

I was concearned about working with Fremont since this division was in the process of being sold. Maybe since they are getting out of the subprime business they may be willing to make some fire sales.

Bovine: Thanks very much; that’s encouraging. Will Fremont pay a commission or do you recall?

Yes they paid a sales commission to the listing agent and I think it was 4%.