Posted by Todd on February 26, 2001 at 20:20:26:
Thanks for the input Jim. The person with the 2nd is going to offer a short sale to the 1st position if I dont to protect his position. When you say make an offer as low as you can, on a 42k note, how much is that? 20- 30k? Also,how much earnest money am I going to have to put up, and will they accept an offer with lots of weasel clasuses like Bronchicks single page form? Thanks again Jim.
Foreclosure Short Sale Offer??? - Posted by Todd
Posted by Todd on February 26, 2001 at 19:31:28:
I need help with this possible deal. I got a call from a guy who will be foreclosed on March 30th. House is worth 60K, it has a 2nd mtg at 18k by private party who I contacted and he will take 10k for it. The first is with Long Beach Mtg Co for 42k. They want me to fax them an offer for for a short sale on it. How much should I offer and how can I make this a no money down deal? Thanks for your help in advance!
Re I don’t see it - Posted by NJDave
Posted by NJDave on February 27, 2001 at 11:39:06:
Here is the short version: Put yourself in the first mortgagee’s place. Why would you agree to accept less than you are due if you are assured of being made whole? Don’t buy into that nonsense about first mortgagees agreeing to ridiculous shortfalls simply to avoid an executed foreclosure. That rarely happens. Their number crunchers will only agree to a short sale if it makes financial sense to them, and they utilize a time value of money spreadsheet. All the second mortgagee has to do is join the foreclosure (a common practice) and he would likely to recover close to the $10,000 that was offered. Since the second mortgagee already discounted the second mortgage from $18K to $10K, I’d say that this is your ‘short sale’ and (IMHO) the first will reject anything that results in anything less than their being made whole.
I agree with a previous post that suggest that you should revise your offer to the second mortgagee to $6,000, but be prepared to justify your reduced offer.
Re: Foreclosure Short Sale Offer??? - Posted by Jim IL
Posted by Jim IL on February 26, 2001 at 20:05:51:
Todd,
First, you say the property is worth $60k? Verify that as best as you can.
Then, you already have the 2nd willing to sell to you for $10k. Frankly, I’d go for less with this. If the first forecloses, he gets ZILCH, so offer less.
Then, make an offer to the first for as low as you can go, and work up.
Try to keep the total amount of both notes to less then 60% of FMV.
Get the seller to deed the home to you, and obtain hard money for paying the notes off.
Then sell this puppy as fast as you can.
Or, if you could find a partner, someone with cash, maybe buy the first at a HUGE discount, and foreclose the second away.
Plenty of ways to handle this, if the numbers work.
Good luck,
Jim IL
Worth a shot, though? - Posted by Stacy (AZ)
Posted by Stacy (AZ) on February 27, 2001 at 12:31:34:
Here’s an interesting thread from the financing forum.
http://www.creonline.com/real-estate-financing/wwwboard6/messages/3497.html
Maybe it’s one of those rare occurrances you speak of, but without trying, this huge gain would have never been realized. In case anyone is wondering, it was an out of state institutional lender that agreed to the discount (I received an email answer to my questions).
Sometimes I think, for the price of some phone calls, and documentation, it may be worth a try on every preforeclosure. It may be rare, but it will be worth it when one does work out.
Something to think about.
Stacy