You must speak to the Loss Mitigation dept at the bank that is holding the mortgage. You may want to ask them if they require forms to do one, like a net sheet, a hardship letter from the homeowners, comps, estimate of repairs … just to name a few. This is a really good way to do a deal that had no equity. The only way a bank will do a short sale is if the home is in foreclosure.
If you find homes in foreclosure with more than one mortgage, that can be a really good thing. If a home goes to the sheriff sale, only the bank in 1st position get’s paid, the other mortgages get wiped out, so many times if you contact the banks in 2nd or 3rd place, they will take pennies on the dollar because if it goes to sale, they will receive nothing.
Re: Diff between SHORT-SALES and PRE-FORECLOSURES - Posted by Redline
Posted by Redline on October 07, 2003 at 23:17:14:
A pre-foreclosure means the property is IN the foreclosure process but has not yet gone to sheriff sale to be FORECLOSED. Depending on the state this can be a 12 month+ process. Also note some states don’t do judicial foreclosure so this doesn’t pertain.
A short sale is when a lender agrees to accept less than what they are owed for a house. For example, you find someone in foreclosure who owes $100k on their house and the home is only worth $90k. You would attempt to convince the bank that they will never get full value for this house and they should sell it to you on a SHORT SALE for $x dollars.