Making too much money to short sale?

 

I have a client who is netting $450,000 on his taxes.  His expenses are approximating $700,000.

These expenses are not deductible to his business.  He has four condos and would like to short sale at least two of them. 

Can we get a short sale done with BOA in this circumstance?  How do I find out from BOA before I go down the road with a contract?  Thanks for the help.

 

 

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Permalink Reply by Bryant Tutas on October 10, 2011 at 2:10am

David. It's been my experience that yes he can do a short sale, However, he will have to be wiling to participate in the loss with a cash contribution, prom note or both. The only way to find out is to go through the process.

Permalink Reply by Jeff Payne on October 10, 2011 at 6:03am

I agree with Bryant!  Have done several just like this.  Income is really irrelevant to a certain degree, it depends on the expenses and it looks to me like your seller is losing $250,000 per year.

Go for it, Bank of America doesn't take long to make their decision once the package is submitted

Permalink Reply by david milstead on October 10, 2011 at 8:40am

Jeff,

 

Thanks.  Can you submit the package before putting it under contract?

Permalink Reply by Bryant Tutas on October 10, 2011 at 8:57am

Yes you can start a BofA short sale without a contract. Just initiate the short sale in equator. It will then ask you if you have an offer or not. The just follow the instructions.

Permalink Reply by david milstead on October 10, 2011 at 9:08am

Can you get an approval to move forward with the short sale or acceptance of the Seller's condition without a contract?

Permalink Reply by Donna McClelland on October 16, 2011 at 4:34am

Hi David,

BofA actually states in their PR seminars online that they will do short sales where there is no financial hardship.  Bryant is correct (as usual) that the seller will have to contribute cash or a promissory note at closing to make it happen.  I always pre-qualify sellers up front on their willingness/ability to do this.  If they are able but not willing, I walk away.  Making successful short sales happen is a team effort and one of the most important team members is the seller. 

Permalink Reply by Wendy Rulnick on October 10, 2011 at 6:51am

David - I would just "go down the road", and make sure he has his eyes wide open. As Bryant and Jeff say, as he will probably need to contribute to the loss.

Permalink Reply by Bryant Tutas on October 15, 2011 at 11:55pm

xx

Permalink Reply by Sam on October 16, 2011 at 1:30am
I have seller who was in a very similar situation, almost exact same income. Had 6 properties, 5 are gone via short sale, 3 of the 5 were BOA. Hardship was clear with the first one but has dwindled down to almost no real hardship now. They have not had to contribute anything to any of the closings, that being said, they had one approved with BOA not waiving deficiency, they were given the option of $15k contribution to waive, which they declined and went foreword with closing. They felt if BOA persued post closing, they could settle for less, which was their call. I insisted they they retain legal counsel to supervise and advise through the entire process as the stakes were very high and they could afford to pay an attorney to make sure their interests were being reviewed on the legal side.

Obviously the loans were in default, I don't expect the results would have been the same otherwise.

Another big factor is that they had dwindled their saving down to almost nothing. I have found that a bigger trigger to contribution requests is cash or cash equivalent securities then income.

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