I have a pending short sale house value 280K as is
1st mortgage 210+3 back payments of 3k each
2nd mortgage 54k
I want to know what the purchase price should be? I want to go as low as possible and I am going to short the 1st as well as the 2nd HSBC is the mortgage holder on both of these. The house is in perfect shape no repairs needed. I want to have the 1st accept 200 that is less than 10% discount and in this market that might work. I want to get the 2nd to take no more than 10-12%. I want to be in the 200-205 range. What should my approach be there is a lot of equity in this with over 4000 foreclosures in IL itself. I dont think the bank wants the house, I have cash ready if they want to close asap. Besides that what can be done to prevent the bank coming after the home owner after we short this? The home owner wants to be assured that they are not going to come after him. What should be respone/next step. Any advice will be appreciated
Thank You
There are basically two ways that a lender has to go when the payments stop - a judicial or a non-judicial remedy.
A judicial remedy occurs when the lender asks the court to foreclose on a property. If the lender takes this course and, as a result of the foreclosure, there is not enough money to pay the obligation in full, the lender can ask the court for a deficiency judgment against the borrower for the remaining money owed.
A non-judicial remedy occurs when the lender has its trustee hold a sale of the property. The lender has no right to request a deficiency judgment if there was a trustee sale.
If the lender accepts a short sale, the property cannot go into foreclosure since they have agreed to accept less, thus the lender cannot seek more from the original buyer.
You might want to check with your local laws regarding this but what I have outlined is the way it works in most jurisdictions.