Posted by William Flood on April 30, 2007 at 12:48:24:
Countrywide is notorious for being stiff to work with. Even my Countrywide broker steered me away from them himself!
Tim, I’m going to point you to two things - first it’s all a numbers game. You might have to get through two dozen assertive deals before you get one accepted. Secondly, it may be you are asking for too much of the pie. I looked at your first set of numbers and saw the seller willing to go 80% of the loan. If the value of the property was higher than what was owed, and if the property was in good shape, you might have stumbled upon a deal and didn’t know it. Same thing with the $104K property.
I’m not advocating a margin of 20%, but I am trying to show that you are obviously finding things to work with, but perhaps looking for too much equity which is turning the lenders off of your offers. It’s a tough balance.
Several months ago I flipped the switch so to speak, and put things into Action to get my real estate investing business off the ground. My main focus for the time being is wholesaling to generate some needed cash for starters. At present I have 5 properties in which I currently have submitted short sale offers on. So far I am 0-2 on submitted short sales. On the first property the homeowner owed 74k, and after the BPO the lender told me that they would accept $59,900 which was definitely not deal worthy for me compared to what houses in this neighborhood have been selling for. Had to let that one go. Yesterday (Saturday) I received a call from the homeowner of one of the properties that I had a submitted short sale on, and she told me that the bank would not accept my offer of 80k, and that the appraisal (BPO) came in at 127k(two comps on the same street sold for 131k & 138,500 within the last year…also this house sold for 155k back in '03). She also said that the letter from the lender said something to the effect that they (lender) needed $104,800 for HUD. I’m not quite sure what that means so if anyone could shed some light I’d appreciate it. Both the homeowner, and I were very surprised that the appraisal on this property came in that high. I know that it’s supposedly imperative to try to influence the BPO, but quite frankly from experience that seems Much easier said then done. I’ve brought comps (Usually lower), & rehab estimates in the attempt of trying to get a lower BPO. It truly seems like every agent that is doing the BPO has their own agenda, and guideline that they are following & any info that I bring to the table is for the most part meaningless. Having said all of this there are a few other questions that I do have that if you vets could share your thoughts on I would very much appreciate it. #1. On the first deal that I mentioned above the lender was Countrywide. On the second one mentioned above the lender is Citimortgage. Are there some lenders that are much more difficult to do a short with as opposed to others that are more flexible as to what they will, or won’t accept? #2. When submitting my short sale proposals I’ve been including sales agreement, net sheet, comps, & rehab estimates when I do have them. Do any of you vets suggest any other info that could be beneficial? I think that I saw somewhere some kind of “Breakdown Sheet” that was a Freddie Mac form. A sheet that showed the difference between accepting a short sale as opposed to the property going to sheriff sale?? #3. Can a short sale be submitted on a property when there is not a current mortgage foreclosure suit that has been filed, or is that one of the pre-requisites? There’s a homeowner that I spoke with a couple weeks back that told me that he could not afford the monthly payments on this house (was a rental), but that there was not a current mortgage foreclosure suit that had been filed. #4. How late into the process will the lender typically accept/enterain a short sale? Will they usually entertain a short sale offer even if it states on the court docket that there has been a judgement for the plaintiff (which typically it’s not too long after this that the sheriff sale is scheduled…I’m in a judicial state)? Or, will the bank usually just go ahead with the sheriff sale since it’s already this late into the process? #5. For you vets out there that have been going full steam with this for awhile do you typically cherry pick the deals in which you decide to offer short sales on? Main reason for this…end of last week I got a call from a guy who is facing foreclosure…he has had his house listed with a realtor for several months with no bites…he owes about what the property value is worth, and upon seeing inside his home the house really does not need anything at all. Some Very small cosmetic related things, and this house is ready to move in. Would you vets typically walk from this since it’s probably doubtful that the short can be gotten down to a point that would make this deal worthy?
Thank you all for taking the time to read this long post, and for any thoughts & input that you can share.
Tim