Sometimes being new has its advanatages Mike… I actually didn’t read, or don’t remember reading in the original post about the 1st and 2nd being with the same co… Sometimes when you get a little (or a lot) of experience under your belt, you are rushed, like me, and tend to miss things… (details).
The fact the 1st and 2nd appear to be with the same company may be a factor, but not always… While I am not sure about Wells Fargo’s practice on this, I do know of other companies who make 1st and 2nds and actually the 2nd ends up coming from a different pot of funds, and even a susidiary company, at times. They do often treat the 2nds as if it were a completely separate company, and not always apply the same yardstick to evaluating those, as they might the 1st mtg… So it may be relevant, being with the same company, but I wouldn’t allow just that factor to effect how I would deal with them. I have seen too many of them spin off or abandon a 2nd due to higher risk perameters and guidelines…
Thanks for pointing my oversight out to me… as I had not previously picked that detail up on first blush.
I’m trying to figure out whether I have a good deal here and how to go about it.
Here are the numbers:
160k First 42k second, both with Wells Fargo. Foreclosure date scheduled for the 29th of this month. Comps are coming in at 210. House is 3 years old, one owner, needs paint & carpet. Tax value is 184k.
My question is what price can I come in at to get the lender to short this? The seller said she recalled the rep saying they might possibly forgive the second to sell the house at 160k, does this sound possible? I already have been added as an authorized person and had seller get me all their financials and write the hardship letter. I’m trying to find a HUD1 online to complete the package but only ones for sale are for title companies.
Now I’m just trying to figure out how to help sell this house quick for her. Had a TON of response to an ad I placed online so there must be an interest in these numbers. Just dont know what price to list / bring in offers to Wells. This is my first one so I’m looking for some much needed help asap.
Thanks in advance,
Mark
“The seller said she recalled the rep saying they might possibly forgive the second to sell the house at 160k, does this sound possible?”
Not likely if the home comps at $210,000. All preforeclosure short sale negotiations are predicated upon the home’s as-is, fair market value. Foreclosing lenders seek to maximize recovery and don’t give anything away. If your numbers are accurate, the senior mortgagee will be made whole, while the second lienholder could/should recover a substantial amount at foreclosure sale.
Your post suggests you are acting in the capacity of a real estate broker, or brokers agent. Not a lot of time to list the house for sale, and produce a qualified contract of sale, and negotiate terms of a short sale.
Yes this just fell into my lap last week and I’m trying to help or do whatever I can. Is this a situation where maybe a “subject to” may work? I believe she is 3 months behind on the mortgage. Also is there any way to delay the foreclosure sale in case we get a contract on the home?
In regards to the homes value, I do believe with all the repairs needed that I could get a low BPO. Also the location at the entrance of the community and on a main drag could lower it as well. Realistic value before repairs about 175. I may be wasting my time but I dont want to throw in the towel until I know I’ve done everything to help this woman. She’s really nice, just an unfortunate situation.
“She’s really nice, just an unfortunate situation”
This is not necessarily a good enough reason to chase a deal… although it sounds like you are doing so as an agent, and not an investor… Your motivation is your motivation, whether that is of the same vane that folks here would prescribe advice from, is questionable.
With that said… I am not sure that I agree with NJD’s opinion, (although he has considerable short sale experience); “the second lienholder could/should recover a substantial amount at foreclosure sale”
If the property were to sell at sale/auction for 80% of the FMV, (210K @ 80% = 168K), the first mtg of 160K with arrearages and Attys fees could easily eclipse the 168K-170K number. Therefore the 2nd mtg is highly at risk of being shutout completely, and recover little to nothing. Hard to know what it may sell for at the auction…, but the 2nd might be of the mindset that 5K is better than nothing… depending on who the lender happens to be. Some will, some won’t… The only way to know is to propose the deal/question to the 2nd mtg lender, and see what they say.
Since the sale is scheduled in 2 weeks you have precious little time left to orchestrate such a deal. If you are not able to get some positive feedback from the 2nd mtg lender yet this week, I would give you little prospect of being successful, since we are coming upon a holiday next week… and little happens during that period.
You’re right. Totally depends on the market. If properties are auctioned at 80% of market… the second’s exposure to loss is greater, as you point out. But, if properties are going for 100% of FMV… the second’s position is a bit more secure.
Yes, if the props are still selling near 100% of FMV @ Sheriff Sales, then you could be right…
My experience of late is that bidders and prices are lagging, in light of the slowing market… Actually, I have even seen a few respectable deals… bids nowhere near 100%, unless the lenders are buying back… but investors or third party buyers haven’t been going much over 70%. You mileage may still be varying from that.
Re: really nice, just an unfortunate situation - Posted by Mike in WI
Posted by Mike in WI on November 16, 2006 at 22:58:47:
Being new, I read the original post that started this thread. It stated that both the 1st and 2nd mortgage were held by Wells Fargo. The subsequent posts sounded like they were referring to the 2nd being from a different lender than the 1st. If they are both actually from the same lender (Wells Fargo) would that change anything, or would the lender still look at it as though they were separate lenders on each loan?