Payoff Discount - Posted by BrianS

Posted by Ben (FL) on May 11, 2000 at 07:08:05:

Is getting a discount from a lender on a house they are foreclosing on considered a “short sale.” I just got a contract on a house with FMV = $92,000. I’ve negotiated an $18,000 third mortgage down to $4k (ok I should’ve offered them $1k), and a $12k 2nd mortgage down to $3k (see previous parentheses). Balance on the first mortgage is $61,000 plus 6 months unpaid interest and fees. Of course, any calls to them are directed to the attorney.

How do you suggest I go about asking for a discount on the first?

Payoff Discount - Posted by BrianS

Posted by BrianS on May 02, 2000 at 20:50:28:

How would can I find out what kind of discount my mortgage holder would take for an early payoff. I am going to sell my house and read previously about discounts for early payoff. Here are the numbers if they help.
Original mortage 94,000
Principal owed 80,000
FMV 115,000
30 year note at 7.5%, all payments current for the past 7 years. The mortage holder is GE Capital.
Any assistance would be appreciated.

Re: Payoff Discount - Posted by Ben (FL)

Posted by Ben (FL) on May 11, 2000 at 07:03:37:

I’ve dealth with GE Captial before. I don’t know whether they are evil by choice, or whether they are so big that it just seems that way. They are EXTREMELY difficult to work with.

Re: Payoff Discount - Posted by John Behle

Posted by John Behle on May 03, 2000 at 18:11:32:

There is little chance that a lienholder on a current loan with a decent LTV ratio will take much of a discount if any.

You don’t say if the loan is current or not. Is it?
Is the lienholder an institution or a private individual?

An institution will consider a discount if the loan is in foreclosure or the property values have dropped dramatically. Otherwise, there is little chance.

A private mortgage holder may consider a discount any time when getting the money early might be attractive to them. It’s always worth it to ask.

Re: Payoff Discount - Posted by phil fernandez

Posted by phil fernandez on May 03, 2000 at 16:55:32:

I doubt if any bank or institutional lender will discount at all. Especially if the mortgage is current. But as Doug says, ask anyway. It won’t hurt.

Re: Payoff Discount - Posted by Doug Pretorius

Posted by Doug Pretorius on May 03, 2000 at 08:28:44:

Ask them!