Posted by James (fl) on September 11, 2003 at 21:53:31:

It seems to me the problem is that Option One has a seasoning requirement. Most sub-prime lenders do have seasoning requirements. You need someone who is qualified for a conventional loan that does not have seasoning requirements, or sign a lease with an option with the person, have him lease it from you for a year, possibly giving you some option money up front, and get your money in a year. $30K is a LOT of money, and if that is the only way to get it, I would think it is worth waiting one year for. Either that, or find another buyer who is better qualified.
Countrywide will look at the HUD from the closing of YOU purchasing the house, and the requirements are that the seller cannot receive any money from the sale of the house. A simultaneous close will have nothing to do with them as long as your title company does not decide to show Countrywide the second closing HUD considering they would not have an interest in it anyways.

Just my thoughts.



Posted by Sean on September 10, 2003 at 15:49:01:

Heres the situation I am in…

I have negotiated a short sale with Countryide (1st lien holder) and HomEq (2nd lien holder) for a property in preforeclosure status. I have gotten Countrywide to discount to 83k and HomEq to discount to $2500 for a total of $85500.00. I have an end buyer lined up who is waiting to purchase the property for 115k with financing through Option One. Everyone is ready to close…but there is a problem. Option One, along with 99.9% of the other lenders in the country have seasoning issues and wont fund a deal that has not had the same owner on record for 12 months! So, with this in mind, how do I collect my 35k profit. I know there are a ton of people on this board who claim to have experience with closing short sales…so I really need to hear from you. All of the Gurus out there selling short sale courses neglect this issue, which is the #1 most important issue because unless there is a way to solve this problem, these short sales are next to useless for these type of quickturn transactions.
I am sure I will get a bunch of responses criticizing me for calling them useless and claiming that they can be done with ease…and these are the people who I want to engage in conversation with so I can be enlightened on how to close these. I will ANXIOUSLY await responses. Thank you in advance for taking the time to respond to my post.

Re: NEED HELP - Posted by Tim- chi.

Posted by Tim- chi. on September 19, 2003 at 08:09:12:


I’ve followed your post with much interest. I’m curious if you have ever asked the bank to buy their position at a discount. On four occasions I’ve tried this without any success. Finally I was told that banks will no longer assign their position to private parties due to liability concerns. I have had success doing this with small commercial loans which are riskier as the underlying collateral is usually old office equipment and a/receivables.

If you were able to step into the banks shoes you could proceed with the deal because you no longer have the concern about the bank backing-out of the deal when the see the closing statement and discover you’re getting paid $30,000.00.

If you or anyone you know has had success with this I’d like to know as I would like pursue this strategy, hopefully with better success.

Good luck,

Tim Foley

Re: NEED HELP FROM ANYONE - Posted by Sean

Posted by Sean on September 17, 2003 at 12:26:18:

How much seasoning does the lender require? Seems to me, since you already have the contract for purchase in your name, you should be able to simply assign that contract to the buyer… and take your 35k as an assignment fee.

Provided the properties appraisal is enough to where the buyers bank is safe with the 115k loan, don’t see why this is an issue.

Your name is never in the line of title, so no seasoning issues, and your seller didn’t make a dime in profit… you got it all.

Re: NEED HELP - Posted by rm

Posted by rm on September 17, 2003 at 08:44:53:

Did anyone ever give you a good answer to this question? Please let me know if you’ve found a solution, as I’ve been originating new loans for my short sale purchases due to this very issue.


Will this work? - Posted by Gene Texas

Posted by Gene Texas on September 13, 2003 at 22:36:09:

Do the trust thing with seller’s name conspicously on it, Sean takes BE at closing & Sean’s trustee signs a deed at closing.

Gene Texas

Re: NEED HELP FROM - Posted by Terry (Houston)

Posted by Terry (Houston) on September 11, 2003 at 11:39:06:

I don’t have an answer for you on the question you are asking but I do have a question if you do not mind.

What was the amount that you were able to talk Countrywide and HomeEQ from?

Thanks in advance.
Terry (Houston)

short sales - Posted by bruceb

Posted by bruceb on September 11, 2003 at 05:56:53:

Sean, I posted a message to JP. She is having a short sale guru on the radio show today. I asked her if she would pin him down on my two questions, see my post below hers. It looks like everyone went to sleep. I would, however, like to keep asking until we can get some answers. I will try and listen in to the radio show.

see ya, Bruce

Question… - Posted by JCR

Posted by JCR on September 10, 2003 at 17:02:01:

Not speaking from experience but how about a simultaneous close?

Re: NEED HELP - Posted by Sean

Posted by Sean on September 19, 2003 at 10:29:22:

I am not familiar with that technique. However, it sounds like an interesting idea. I hope we can get some stories from people who have in fact pulled it off.


Re: NEED HELP FROM ANYONE - Posted by Sean

Posted by Sean on September 17, 2003 at 13:31:25:

The lenders taking a short sale will squash that right away. Why would the first take a discount of 20k and the 2nd take a 90% discount ($23500) and allow me to come in and make 30k+? Unfortunately, it does not work that way.

Re: NEED HELP - Posted by Sean

Posted by Sean on September 17, 2003 at 09:26:17:

nope, the self proclaimed “experts” that close these deals all the time never responded. They have the answer to all the other posts…but evidently do not have the answer to this one. To answer this one, you need to actually be doing what you claim and closing short sales. If not, they can talk all they want on the boards, but apparently it is smoke and mirrors! Sorry, wish I had better news.

Re: Will this work? - Posted by Sean

Posted by Sean on September 14, 2003 at 08:27:29:

Unfortunately, that does not work because the lender discounting will not allow the seller to make a profit. If they would, it would be simple. Unfortunately, they wont though.

Re: NEED HELP FROM - Posted by Sean

Posted by Sean on September 11, 2003 at 11:51:48:

Countrywides payoff was around 100k (off the top of my head) and there appraisals came in at 99k. It is important to note that although the courses from the gurus say they always order just a BPO…that is not true. Most of the companies I have dealt with so far are ordering appraisals. Anyways, it was FHA so they discounted to accept 82% of the appraised value (actually just under 82k). HomEq was a real pain, as was Countrywide, but they finally came down from $25000 to $2500.

Re: short sales - Posted by Sean

Posted by Sean on September 11, 2003 at 09:17:50:

Thats great!! Let me know what you hear. Thanks!!


Re: Question… - Posted by Jo

Posted by Jo on September 10, 2003 at 17:20:07:

Good idea but the closer has to reveal to the final lender what is taking place. Lender’s instructions are extremely detailed in what must be revealed.
But, like Sean asked, I also read on this board how you RE investors are saying you close these all the time. If so, do you know the details or not.

Re: Will this work? - Posted by Gene Texas

Posted by Gene Texas on September 14, 2003 at 11:21:33:

Then I would get with a mortgage broker who has access to MANY Account Executives (AE) & get him to call them until he finds one with no seasoning requirements. This DEFINATELY can be done. There are 10000’s of lenders out there!!! Consider if your loan officer or mtg brkr has the ability and/or desire to do this- you may be with the wrong person. Also here is the ultimate answer… do a search for the “mortgage grapevine”. Good luck & let me know how it works out.

Gene Texas

Re: Is it possible… - Posted by Jim V

Posted by Jim V on September 11, 2003 at 22:42:36:

…that the lenders actually had valid appraisals at a value of $99k?

In general, lenders will have problems when a borrower is willing to pay something like 15% over market value unless the borrower is very strong or the local market is very hot.

If I was a loan underwriter, which I’m not, I’d be looking at your deal very closely, because from what I’ve read, it looks like an inflated value resale.

Just because Countrywide/FHA and HomEq might be willing to take a loss, doesn’t mean Option One wants to join the club.

Just a thought, but seasoning might not be the only issue you’re dealing with.

Re: Question… - Posted by Sean

Posted by Sean on September 10, 2003 at 18:29:34:

Jo is exactly right, the closer must reveal what is taking place to the lender. I was wondering how long it would take for one of the RE investors that supposedly close these all the time would say they do a simultaneous closing. I realize JCR was making a suggestion and not speaking from experience. However, there are so called short sale “experts” that supposedly close these all the time. They are mysteriously not answering this post?

Re: Is it possible… - Posted by Sean

Posted by Sean on September 12, 2003 at 09:11:47:

I certainly agree that no lender is crazy about financing 15% over market value…even when the market is hot and with strong credit. However, when Countrywide ordered there appraisal, I was the one with access to the property to let him in. I spoke with him for quite awhile and pointed out a bunch of little cosmetic problems etc. So, the appraisal ended up coming in at 99k for whatever reason.
If you are not aware, this sort of thing is common. There are comps to support anywhere for 95-130k on this particular house. That is a large spread, but there are certain reasons which are irrelevant to the question at hand (initial post). Anyways, the end appraisal came in around 115…which is very realistic.

Anyways, point is that there is no inflated appraisal involved and the deal is clean. Also, if you were a loan underwriter, you would not know anything about Countrywide or there appraisal. Same goes for HomEq or any other current lender. The loan underwriter does not go through a deal calling up previous lenders or researching what they do with there loan.

So, now were back to the initial question. Thanks for your post.