Upside Down Mortgage

Posts Tagged ‘estate’

Loss Mitigation Short Sale

Question: Short Sale?

I'm so confused right now, because I'm trying to purchase a short sale. The seller has accepted my contract and now it's with loss mitigation. My lender doesn't think it's valid because we offered 265 and she owes 325. My agent says that the loss is not that big, because of the current housing market, and the listing agent says he is confident it will go to closing. My lender wants me to look at other options, but i really like this house. I do have something else as a back up, but what I want to know, is it normal for the bank to take a 60k loss, or is our offer amount really not enough to get it approved.
Thanks for all answers
Here in the Washington Dc area, the seller is able to pick which contract they want to go with, and then it is submitted to the bank for approval I know that the bank has to approve it, my question was do you think that they will take that much of a loss?

Answer: All short sales are contingent upon bank approval. This process could take anywhere from a few weeks to months...(just to get price approval) Your lender is correct, you don't have a valid contract until the bank approves and the seller signed contract basically means squat right now. In most cases the banks will take a loss and sell the home for slightly less than Fair Market Value...if it goes to foreclosure they will lose alot more. It is all going to depend on the bank, Fair Market Value of the House and whether or not you have more than one lien holder on the property. If there is a 1st & a 2nd you are going to need bank approval from both.

The last short I did the 2nd lien holder got $1000.00 on a $80,000 note, so they can work (in rare circumstances) Good Luck, consult your agent. Not giving legal advice.

Millionaire Gary Prescott Speaking to Loss Mitigation

If you're new around here, you might want to subscribe to our Upside-Down Mortgage RSS feed. It's quite likely the only feed of it's type on the internet!

Loss Mitigation Short Sales

Question: Confused about selling a home for less than our mortgage amount?

We owe $35M on a rental property that we purchased for $40M a few years ago. The area in which the property is located has gone down the toilet for the past few years and the home is now worth around $15-$17M. We received an offer of $15M for the home and we need to take it. We can't keep a tenant in the property any longer because of the crime rate. The property has been robbed/vandalized 3 times already. We contacted our mortgage company to see if we could pay them the $15M from the closing, but then get an unsecured loan from them to continue paying the balance. The immediately sent us to the loss mitigations dept and started talking short sale. I didn't even know what that meant until I googled it online. If we were not asking them to write off/forgive the balance, why are they talking short sale? If they can't lend us the balance, unsecured, why didn't they just say so and hope that we could get an unsecured loan elsewhere? I'm so confused...

Answer: For them to approve a relase of the lien and to convert the loan from a secured mortgage to an unsecured note they'll need to get an approval. It is a short payoff to release the lien, even if you are paying off the remainder, so the loss mitigation department is the logical department to handle it.

Most short sales they do forgive the remainder but on some they take a note, and you fall into the latter group. Just cooperate with them and you'll be fine.

Good luck.

Loss Mitigation and Short Sale Secrets

Mortgage Modification September 2009

Many homeowners are able to solve their financial problems by accessing President's Making Home Affordable (MAH) plan. The MHA plan officially became law on March 4, 2009 and now millions of homeowners across America who were facing foreclosure have a way to save their homes. The plan also creates a lot of questions about the difference between loan modification and FHA refinancing.

You should know that a MHA plan is only accessible for homeowners who have mortgages backed by Freddie Mac or Frannie Mae. There are other plans that work with other types of loans, but they are not as easy to access, apply for or get as the MHA home loan modification plan. The government is trying to find a way to have the MHA cover more loans.

If your hard times are due to the economic recession in the United States, you are in good company. A lot of people are having trouble paying their mortgages and there are two things they can do in reaction to this. They can modify their loan using the MHA plan or they can check out FHA refinancing. What one you choose is dependant on who insures your mortgage loan. If you do not know who this is, call your lender and ask.

If you have a FHA loan, you can access the HOPE for Homeowners program. This program allow homeowners who do not qualify for more traditional methods of refinancing, a way to get it. In the past, homeowners have had to have 20% equity to qualify for refinancing, but recently, in a falling market, people have actually lost equity. This is not the fault of the homeowner and HOPE for Homeowners acknowledges this. In order to obtain this type of refinancing, homeowners must participate in equity sharing if they want to avoid foreclosure.

Equity is how much of your mortgage loan you have paid off. HOPE for Homeowners requires those who refinance under this plan to split their equity with them when the house is sold. If you sell your house within the first twelve months of refinancing the FHA gets all of the equity. If you sell it after five years they get half. This plan can be accessed until September 20, 2011 through the FHA.

If Frannie Mae or Freddie Mac insures your loan, the MHA will handle your loan modification. If you are paying 31% or more of your gross monthly income on your mortgage, you are able to apply for a loan modification to get your mortgage payments reduced to something you can afford. There is a set procedure for a loan modification. They begin by reducing interest rates until they hit 2%. When a lender approves a loan modification, they get an incentive payment from the government as a reward. Borrowers are also given an incentive if they pay their modified payments on time. They also get to keep their house.

Both a loan modification and FHA financing can help you avoid foreclosure and allow you to stay in your house. This article has outlined how to decide between the two options.
About the Author:

For essential tips and facts about how to get approved for a Loan Modification, Visit our simple, no nonsense loan modification guide and resource: http://MortgageModificationLoan.net/

Source - Comparing Loan Modification and FHA Refinancing

snsquotes's webcam recorded Video - September 07, 2009, 09:59 AM