Replies to This Discussion

Permalink Reply by DeLisa Rose on March 29, 2012 at 12:50pm

Hi, yes. The balance, purchase price etc have nothing to do with a banks decision to qualify a short sale.  The seller may have a net of 5k, but likely does not want to or can't bring the shortage to the table to close. The cannot afford to pay to sell the home.

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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on March 29, 2012 at 2:11pm

What's the actual Hardship ?

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Permalink Reply by DeLisa Rose on March 29, 2012 at 4:18pm

The hardship seems like they want or have to move for a job or family (?) and that they can't afford to maintain both places (?) and that in order to sell their home they would have to pay 200,000 in order to have the lien released which is a hardship. Additionally, if the bank doesn't participate with the short sale the property may likely go into default.

I am assuming this is their hardship, or what is it?

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Permalink Reply by Kevin - Greenville, SC on March 29, 2012 at 8:08pm

I wouldn't say the original balance has nothing to do with it, but very little.

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Permalink Reply by Keri Sweetland on March 30, 2012 at 2:48am

This may be a totally legitimate short sale, but you are needing the following info. to determine that.

1. What is the hardship?  Curtailment of income, job loss, medical, death, increase in expenses?

2. Have them fully fill out a financial worksheet-make sure they put in ALL expenses.  On a home that they purchased for $496K, it's completely likely that their mtg. payments, HOA, taxes, Ins, living expenses, car loans, car ins., health ins. etc...etc...etc... adds up to more than $5K per month.  Make sure they include ALL expenses they are responsible for regardless of their ability to pay so that they can clearly show their hardship. 

3. If they are showing cash (over 2 mortgage payments) in reserves somewhere, the bank may not process them through an incentive program such as HAFA but they may be willing to review them for a traditional short sale.  If they are showing cash, you will want to educate the seller that the bank may ask them for a cash contribution to participate-how much will need to be negotited IF it even comes up at all. 

I wouldn't walk away without having a full picture, it's a decent price point and worth reviewing fully.

Good luck, let us know how it goes!

Keri :)

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Permalink Reply by Jeff Payne on March 30, 2012 at 4:13am

I believe that it may be possible if there is a hardship.  With 5K NET each month, they are going to need to be prepared to contribute cash to the sale.  If they are only $70K upside down, why not have the conversation of them paying the difference.  It gets rid of a large mortgage payment and if they NET $5K per month, that is 14 months of NET income BUT they know no longer have a mortgage payment on this property so they would still have a NET each month.

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