I agree with what you are saying. Shorts are tough enough, and a short with a current loan is like finding a needle in a haystack. I’ve done one, though. I never thought it possible, and a complete waste of time to even try… but it actually worked. The Purchaser (the listing broker) to placate a disgruntled Client, placed a lowball bid… which was incorporated in a supplemental short sale proposal. The offer was accepted by the mortgagee. The broker bought the premises at $25,000 less than it’s as-is, FMV and resold it within a few weeks.
Frankly, short sale acquisitions are time consuming, complicated, and can be an exercise in futility. In good times, why waste your time on a marginal deal when better opportunities abound? But, when deals are scarce… it’s good to know how to prepare, present, and negotiate a compelling short sale proposal.
For a free article, “Short Sales: Child’s Play or Not?” email me.
Wondering if anyone has tried offering a short sale to a lender whose mortgage was current?
Situation, i have an seller who lost his job 2 months ago and cannot afford another payment on his home. he’d rather sell it than have bad credit but can’t since he owes too much. The loan has PMI.
he’s given me authorization and deeded his home to me and I was just reading about short sales and wondering if i should try that instead of sub to.
Re: short sale current mortgage? - Posted by Brent_IL
Posted by Brent_IL on August 24, 2003 at 19:03:17:
A “short” sale when payments are current occurs when the bank is on the wrong side of a significant disparity between older interest rates and new interest rates.
If interest rates go to 8.00% and the bank has a loan out at 4.00%, they may accept less, so they can put the money out at a rate that’s double what they are getting. The bulk of their profit was earned at the beginning of the loan, so the bank wants the chance to earn new fees.
Posted by Harry Winkler on August 24, 2003 at 18:23:29:
It’s hard enough to get a lender to agree to a short sale that’s profitable for you when the homeowner is in foreclosure, etc. so I’d say it’s highly unlikely. In fact I have never heard of them shorting a loan that is current. The short sale craze is just that - the “latest and greatest” strategy people are touting to sell more info products and courses. Yes it’s possible, but it’s not nearly as easy as some people make it sound.