Short Sale effect on Seller's credit - Posted by Monique

Posted by Monique on June 23, 2000 at 07:25:12:

NJDave,

Thanks for the response!

Given the following information, what do you think the chances are that the 2nd lienholder will accept a short sale?

1st mortgage balance is $90K and current
2nd mortgage balance is $30K and one payment behind
A very conservative appraiser could say the house is worth $115K. Though an aggressive one could say more than $120K. The Seller’s income has dropped significantly and they need to get out of the monthly payments. One could make the argument that the Seller would not be able to sustain the payments much longer and would likely go into default.

Since the payments on the two loans are high ($1200/month), this deal is not very attractive Subject To the two existing loans. It begins to look far more attractive if the 2nd would discount.

Are my chances at least 50/50 that the 2nd would rather have discounted cash now than risk getting less later?

TIA,
Monique

Short Sale effect on Seller’s credit - Posted by Monique

Posted by Monique on June 21, 2000 at 08:02:42:

Another short sale question … I keep finding these for some reason.

The Seller’s payment history on their 2nd mortgage ($30K balance) has been spotty since they’ve had it – most payments late, some missed altogether, currently one payment behind now. If I were able to negotiate a short sale with the 2nd lienholder, will this effect the Seller’s credit at all – more than they’ve effected it themselves with the payment history that they have?

Since the Seller’s need to move into another house, I don’t want the short sale (IF I were able to get it) to impact their credit anymore than they already have themselves.

Thanks,
Monique

Re: potential for exposure to an income tax liability - Posted by NJDave

Posted by NJDave on June 21, 2000 at 12:17:45:

but not necessarily. Check with a social services oriented CPA willing to work with the less (financially) fortunate.