I have 2 clients that are going to foreclose on their homes by September 8th deadline. They’re both listing with a realtor but running out of time fast. I’m suppose to meet with them today. According to what they say the payoff is, they don’t have much equity. However, according to my research, the equity is there unless they’ve refinanced.
Do I get them to sign a form enabling me to contact the lender to get the needed information? How should I continue this deal???
Show up prepared with all your documents. I usually have 4 documents:
Disclosure - this is just for me. It tells the home-owner that I am not a lawyer, I am not a realtor, that I am in this as a for-profit venture, I am taking over their payments and am not recommending they stop paying their mortgage, utilities, etc., etc., etc… This document is not needed by the bank, it is just for my file.
authorization to release information
List of documents the bank will need. Signatures not needed on this document. This is just to be up-front with them so they don’t freak out if/when you start asking for pay stubs, bank statements, taxes, etc. This also gets them started with a hardship letter. Finally, this gives them a chance to offer the necessary docs right then and there.
Not enough information given to suggest how you could continue the deal. Equity or no equity, short-sales still work. Not a whole lot of time left but still possible. I have stopped the sale on deals where I got involved only 2 days before the sale date. These may (and I stress MAY) be deals where you should walk away. Since it sounds like you are relatively new, your time may be better spent on deals where the sale date isn’t so looming. Only you know the best, so…
Refinanced and now owes 420k (excluding fees and other charges)
Appraised value around 450k.
5k needed for repairs.
Average home sales take 3 months in this area (PG county Maryland)
House scheduled to go to auction on Sept. 8th 2006.
I am thinking that a short sale might work. But I would have to get the bank to drop the price around 390k (maybe not doable).
I have gotten the owner to sign an authorization allowing me to obtain information from the bank concerning his loan. But I have not yet got him to sign a purchase agreement because when I met with him, I wasn’t sure of my offering price (needed more info on the house).
I have never done a short sale or have I taken over payments. But I think getting the bank to short sale and having the property deeded to me will be my best option. What do you think?
Do you have a Short Sale package that you would be willing to send me? You mentioned that the bank will need a list of documents. What are they? Is that the Short Sale package?
Thanks for the advice turborocket. I will be in touch. I believe short sales and sub2’s are the way to go with the market slowing.
By the way, is it possible to do both a short sale with a sub2? Nowadays most people are foreclosing in my area bcoz interest only loans are now coming do and interest rates are ballooning. With the amount owed it’s hard to rent and/or resell.
IMHO this is a definate short sale. I recently shorted a house that was in great condition, no repairs needed and appraised for $530k. After submitting the initial short sale package and meeting the appraisor at the house, the bank approved $394k. I wholesaled the house the same day I bought it.
I’d say go ahead and do the short and offer a lot less than 390k.
Can I recommend staying on top of the mortgage company to keep moving…I have found that they are receiving so many short sale offers that packages will sit for a week or more without anyone even looking at them…Good luck!!