Perfect example of a short sale actually NETTING more money than a foreclosure
I had a short sale listing with Wells Fargo that was a VA loan. We presented an offer to Wells Fargo that would net just over $125,000. Wells and VA denied it but then allowed the seller to do a deed in lieu of foreclosure.
Property just came on the market as a REO.
Listed at $113,900
Let's do the math.
Assuming VA did not spend any money to get the property back or any money to repair the property (we all know that they spend thousands in attorney fees and asset management fees but we will leave that out for now)
If the property sells for list price $113,900
6% commission, doc stamps, title fees, 2010 taxes would bea approx $11,000 in seller costs
VA nets $102900
So the way I see it, in this small example, the idiots at the VA think that $102,900 is better than $125,000. No wonder our country is in trouble!
I did not account for probably over $10,000 in legal fees to do the deed in lieu, heck at that rate, maybe $20,000 since the VA probably thinks $20,000 is less than $10,000
Multiply the $22100 times thousands of stupid deals like this
Replies to This Discussion
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Permalink Reply by Karyl Moore on
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It's all so ridiculous. I can only think that something is going on behind the scenes that we don't know about - a great conspiracy. I don't know if it makes me feel better to think there's a conspiracy or to think that the lenders/investors are so totally stupid/lazy.
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Permalink Reply by Brigitte Powell on
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Jeff, I don't think they are stupid or lazy or incompetent.....there is another reason why they do this. I thought the Tarp money was no more....They have got to be getting something out of this.
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Permalink Reply by Jeff Payne on
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I believe that they have no accountability and will take the path of least resistance. It is not their money that they are dealing with, it is government money. I am sure that their affiliates, title companies, attorneys etc are making out very well and they probably reciprocate with nice gifts, vacations and other luxuries.
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Permalink Reply by Ro Reed on
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Jeff, I had an HSBC deal with a bad BPO of 75K. Two days on market, 60K cash offer.Rejected! Months later 55K cash. Rejected! Months later I countered the buyer up to 62K, just a few weeks before sheriff sale..Rejected! Listed at sale at 85K so of course it didn't sell. County started mowing the acreage at 300.00 a pop--at the bank's expense. Months later listed as REO at 57K!! It's been pending for a month...anxiously awaiting it to flip from pending to see just how much the bank lost.
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