Posted by Jason on March 03, 2002 at 11:33:19:

I know the $24000 interest sounds like alot, but that’s what the payoff statement lists (and that’s just interest). That doesn’t even include the attorney’s fees and misc. foreclosure fees…with all of that together, that is how we arrive at the total payoff of 169000. Sorry I wasn’t clear on that. I am going to try to get a better idea on this when I talk to the lender tomorrow. Thanks


Posted by Jason on March 02, 2002 at 11:40:46:

I have this I am trying to negotiate with the 1st mortgage
holder. I have to work quick because a foreclosure is scheduled on the property in 18 days. If anybody has any opinions on this I would truly appreciate it. Here’s the deal:
Owner has agreed to deed me the house.
House worth $185,000-$ 190,000 fixed up, it needs very minor work (carpet, some paint
and landscaping). Worth $180,000.00 as is. My strategy is to sell after doing the repairs
(only take a week to do this touch up work) in as is condition.
1st mortgage to Countrywide Home Loan Servicing: payoff of $168803.00 due by mid
2nd held by private owner owed about $3500. Hoping to discount that to $500-$1000.
Do you think that’s possible?
The payoff demand statement on the 1st that the seller gave me shows a principal balance
as of 8/01 of $138853.00
Interest from 8/01 to present come to $24088.00 (???) with escrow balance and
attorneys fees making the total $168803.00 payoff. What is the $24088.00 interest all
about? The owner just stopped making payments in September of last year. It has an ARM around 10%.
I called Countrywide and faxed them the Authorization to Release Info. Countrywide is FNMA backed but on the good side they did say they do short sales. Would they really short sell this note?
What would be a good percentage to ask for discount in this short sale? I’ve read and
heard to start at 80%. Being new to this I’m a little concerned that if they decline then
they won’t work with me to strike a deal. My concern is that they will see what the house
is worth and not accept this. I am considering offering 90% ($150,000) of payoff
balance ($168803) in short sale because I need this deal to put food on my plate.
In your opinion, do you still think that I can try for 80% and not peeve them too
much, worst case settling for 90%. If yes to 80, would it be advised to talk to them on the phone first, or just fax them a letter stating what my offer is and that I have the funds to close immediately. We’re getting down to the wire. I have an investor that has the funding for this
so the money is no problem. What’s your advice??
Someone told me I should try to get them to discount the note and buy the note for around $130000 (which is close to the principle balance). Would a lender be comfortable doing that compared to a short sale? Are they really concerned with the $24000 interest payment or just getting back their principle? If I could get the note at a discount and become the lender, how would I stop the foreclosure since the owner of the home is deeding me the house and is most concerned with stopping the foreclosure?
Thanks for everything

Re: SHORT SALE OR DISCOUNT NOTE??? - Posted by Fred K.B. (SoCal)

Posted by Fred K.B. (SoCal) on March 02, 2002 at 19:03:46:

The numbers don’t add up, for sake of clarity and because it really doesn’t matter in the big picture, let’s ignore the pennies, do some rounding and worry about the piggybank stuff later…

The principle balance of 139k plus total arrears of 24k = 163K. Where does the $169K figure come from?

Also that seems like a bit much for the arrears. Figure the 1st was 175K, payments at 10% for 6 months would only be about $10k, with total arrears of 24k that?s an awful lot of fees.

Go ahead and shoot for 80%, that?s a reasonable amount, might even ask for 75%. These people work with numbers for a living, they don?t live in the house, don?t worry about them taking it personally and not working with you in the future, to them it?s just business.

We tried to discount a second with HFC from $18,500 down to 5,000. They didn?t laugh or hang up, they just went to the supervisor and we finally settled at $9,000. Just business.

Now your second may be with a private party who very well be in no position to back up his position. 500 to 1,000 may be very do-able.

If you get the first to play ball, you should have no problem with the timeline because they?ll work with you. If they won?t cooperate, and you still want to do a deal, 18 days should be enough to do the deed. If you need more time have the owner file chapter 13 and buy an extra 30 days.