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Subject: so i was talking to someone who is starting the short sell process...
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just a girlUser is Offline

Posts:216


06/23/2008 9:33 AM Alert 

and i have a few questions and "what ifs".

So this family  isn't upside down, really.  They just owe what they paid 3 years ago.  However, they couldn't sell for that, obviously. The house next door to them just sold after being foreclosed for about half of what this person owes.  But they've had some bad luck in the job department, and have lost a significant portion of their income.  So the house they built at a price they could afford previously, is too much for them now.  However, they don't really want to lose their house (obviously).  They have made their life here, their kids go to school out here, they like Maricopa. 

So my friend is staring the short sell process.  However, this is what their "plan" is, and I'm wondering if it's even possible.  Perhaps some 85239.com experts can help me understand

So for the first month, they are listing their "dream" price on the house, $280,000.

When they don't get any bites, obviously, they will drop it to the more realistic $140,000 short price. 

They hope to get a couple nibbles at that price, but then counter to the bank saying, "Listen, I can either foreclose on this, you can take one of these $140K offers, OR renegotiate the price of my house with me and we can settle on, say,  $180"  .  and now instead of a $280K mortgage, they have a $180 mortgage, they keep the house, no moving, no foreclosure/shortsell.

Is that even possible? 

azcopaUser is Offline

Posts:92

06/23/2008 10:33 AM Alert 
"So this family isn't upside down, really"

Yes there are unside down, anytime you can't sell your home for what you owe, you are upside down.

"But they've had some bad luck in the job department, and have lost a significant portion of their income."

This I'm sorry to say, because of the poor economy, is going to lead into more and more forclosures.


Remember with a short sale they can list it for what ever they want but the bank has to approve the short sale.

Is that even possible?

No. Banks are not going to sell the home back to the original owner at a reduced amount. Otherwise we all could go back to the banks and say we no longer want to pay the amount that we originally agreed to pay, now we only want to pay ? this much. NOPE NEVER GONNA HAPPEN!!!!!

Hope things work out for your friends. It really is sad and I pray everyday it doesn't happen to anyone else, including me.
LeonPotterUser is Offline

Posts:622

06/23/2008 10:44 AM Alert 

I have to agree; I don't see it happening. Foreclosures happen for a reason. The feds have been, Ben Bernanke being a lead figure,trying to convince lenders to reduce debt obligations for homeowners, but that hasn't been successful.

I'll add this: I believe it is a good idea for anyone to remain in contact with the lender. Specifically, the loss mitigation department. Communication  is key to any negotiation. I don't think the scenario outlined in the opening post is a likely outcome, however I do believe a lender may be willing to renegotiate the terms in other ways ie, lower interest rate, reduce required payment for a certain time,etc.

 


My answer WAS "NO" to Q#5 and Q#1.
Proverbs 22:7
The rich ruleth over the poor and the borrower is servant to the lender.
R/E AppraiserUser is Offline

Posts:53

06/23/2008 7:19 PM Alert 

There ARE programs available that may get the current mortage restructured or re-negotiated to the current market value and other programs that can assist in preventing foreclosure or short sales.  It mostly depends on if the lender is willing to work with them and who is negotiating for them. 

Just because the house next door or down the street sold for a short sale price or reduced bank owned price doesn't necessarily mean that is the value of their property.  It may be to their benefit to find out the actual market value of their property before listing it.

just a girlUser is Offline

Posts:216


06/23/2008 8:30 PM Alert 
I did think the whole thing was absurd, but you never know I guess.

I can't imagine having to scramble to find a new place to live, especially with kids, if i were short selling or forclosing. So trying to stay in their home makes sense to me, but how they are going to do that, I don't know.

Thanks for all your replies.
Cactus RobUser is Offline

Posts:1155


06/23/2008 8:50 PM Alert 

R/E Appraiser & Leon Potter.  I'm hoping you two don't know what you're talking about. 

For lenders to make special deals with some of their customers and expect the others to pay the fully agreed-upon initial loan amount is a very slippery slope.

 

  

 

gizmoUser is Offline

Posts:174

06/24/2008 1:50 AM Alert 

It will never happen. Why would the bank want to negotiate? That would be a sign of weakness. Check out this link. Especially the part about walking away.

www.loansafe.org

Cactus RobUser is Offline

Posts:1155


06/24/2008 7:14 PM Alert 

It looks like taxpayers who live within their means and pay their bills are also going to bail out both the lenders and their at-risk borrowers.  Just how will Congress determine who will get help and who won't?  Wait, don't tell me  ..... it will just upset me!        

Promoting Dependence

By INVESTOR'S BUSINESS DAILY

Moral Hazard: Congress has moved closer to passing legislation to bail out homeowners who are in trouble with their mortgages. Yet again, the taxpayers will be forced to pay for other people's mistakes. READ MORE

 http://www.ibdeditorials.com/IBDArticles.aspx?id=299200652198677

R/E AppraiserUser is Offline

Posts:53

07/04/2008 10:41 AM Alert 
Posted By Cactus Rob on 06/23/2008 8:50 PM

R/E Appraiser & Leon Potter.  I'm hoping you two don't know what you're talking about. 

I apologize for the delayed response, been busy.  I do know what I'm talking about since I work with lenders, investors, buyers, sellers.  Without going into a long detailed explanation and listing several sources and/or programs (some are not as good as others), here is an article that refers to (in my opinion) one of the better sources for foreclosure preventions set up by HUD.

http://www.azcentral.com/realestate/articles/0703biz-fightingforeclosure0706-ON.html   

The article is dated Jul 6, 2008  -  Go figure  -  But the information and resource from HUD/FHA (news releases) came out earlier this year.   In addition FHA is sending out over 180,000 letters (initially) to property owners that are comming at risk.  Also earlier this year FNMA stopped requiring an additional 5% down for properties in a declining market, FHA has increased their limits and waived the 3month period to sell a purchase for 1 year to help increase purchases of bank owned properties to reduce market inventory (anticipating all the resets between 2008 and 2011).

 

 

 

  

 

 

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