Are the short sale qualifying guidelines the same for a primary residence vs. a rental house? I have a client who is currently short selling her primary residence because of divorce. Now she wants to sell the rental she is underwater on. She could afford the mortgage payment, but the maintenance issues are more than she can handle and ex husband is unemployed.
Thanks!
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I've done a number of non owner short sales nationally. Some but not all have had to contribute. If they have little or no cash, you can shoot for a small amount of cash at closing and an interest free note for 5-10 years untilretired. Its better then a deficiency judgement that can haunt them for 20 years and get larger as each year passes. There is a growing secondary market in that type of debt obligation and it can ruin someone financial for years.
The other thing is depending on where you live, they may not waive the deficiency. Be sure to check that out too.
So at that point they would decline the request for the contribution and be able to move forward? She won't have the means for a contribution.
If the lender ask for a contribution it can be negotiated but normally if asked they will have to contribute something. Just negotiate the best deal you can and then let the borrower decide what to do. My experience is that ALL borrowers can come up with some money.
The process for us is the same. Depending on the sellers financial situation she may be asked for a cash contribution and/or prom note so just be sure to mention this at time of listing. Most of my short sales are rental properties.