Just closed an REO, but short sale related!

Intereting REO that I just closed. 

Had been on the market and under contract 12 months ago as a short sale, the listing agent at the time presented a cash offer the the lender, BofA, for $225,000.  The offer never made it anywhere and the home was foreclosed.  This home has termite issues and alot of wood rot and was not able to be financed without repairs.

Fast forward 12 months, it closed today for $140,000 after BofA spent the money to foreclose and maintain the property.

How much money did they actually lose by foreclosing instead of approving the short sale last year?

Views: 60

Replies to This Discussion

Permalink Reply by Jim Hale on March 15, 2011 at 6:29am

Sounds like a great question for the TV show:  Are you smarter than a fifth grader?

 

Such math is apparently way too hard for the lenders to calculate.

Permalink Reply by Steele V. Propp on March 15, 2011 at 6:30am

Nothing new here.  But understand that different departments are involved without each other knowing what the other is doing.  And with the various accounting methods used one can't always figure an easy comparison when it comes to losses.  Perhaps there was mortgage insurance involved.

 

Steele

Permalink Reply by Lori Young on March 15, 2011 at 6:31am
Who was the investor?
Permalink Reply by Jeff Payne on March 15, 2011 at 6:32am

Jim I would love to see real numbers on short sales that were denied resulting in foreclosure.  WOuld be interesting to see the discount from the original short sale offer when it goes REO.  My listing sold for 62% of the original offer and that does not include what the bank spent to foreclose and maintain.

 

Permalink Reply by Jeff Payne on March 15, 2011 at 6:33am
Duetche Bank was the investor, no PMI.  At any rate it is funny accounting if they think 140 is better than 225
Permalink Reply by Steele V. Propp on March 15, 2011 at 6:34am
Were there any other liens to factor in?
Permalink Reply by Jeff Payne on March 15, 2011 at 6:37am
None that I know of.  I was the REO listing agent and knew the previous agent well.  When I got the REO assignment, there were no other liens that showed up.  There was only one mortgage and the previous offer was for $225,000 cash and it was rejected.  Probably alot more to it but on the surface it does not make sense. 

Steele V. Propp said:
Were there any other liens to factor in?

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