ING short sales for investors?
I'm new to the group - I hope we can help each other out and work together!
While some banks are definitely more pleasant to work short sales with than others, I'm at a complete loss in trying to understand ING's claims of preferring to work with their "valued" customers to reach mutually-beneficial agreements rather than going through the short sale process.
I was in the process of negotiating a short sale on a client's behalf who had a 1st mortgage with ING Direct. In a typical customer-service-centric relationship, that customer's ultimate satisfaction and best interests are considered of great importance; of course this does not trump taking any actions that may damage the image or profitability of a company's short-term goals, but winning a repeat customer is important to consider in any business. My client and their spouse both lost their jobs and knew there was no way they'd be able to save their home. They repeatedly sought assistance from ING, but to no avail. Eventually they contacted me to buy the home, negotiate the short sale and ease their burden.
I'm an investor and fully disclosed the fact that my intent was to buy the property and resell for a profit - that's how I get paid and it's done all over the country. This saves the owner from foreclosure, allows the bank to remove the non-performing asset from their books to lend 7-10 times our negotiated settlement back into the market on a performing loan, and I earn a living. Win-win-win. ING's philosophy came from a completely negative perspective: their main concern was denying anyone a profit from the situation, instead of helping the family (who is their customer), and even at the expense of their very solvency!
We all know foreclosure is an expensive process and adversely affects both the borrower and the lender. I offered a fair cash price with my intent to profit...their reply? "We just won't do that. At that point we'd rather just take the property back." Thereby sending their customer into foreclosure and possibly bankruptcy, and netting the lender less money after holding costs and legal proceedings?
Can someone please help me understand??? Thanks everyone,
Mark
Replies to This Discussion
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Permalink Reply by Bryant Tutas on
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Mark. I guess my question would be.....fair cash offer for who? You? Or the bank? I've been very successful with short sales with ING Bank. But they do want as close to market value as possible. Is your offer close to fair market value? Is your profit coming from improvements you plan to do to the property or are they coming from loss to the lender? If the property was placed on the open market now for 60 days would the seller and ING Bank be able to get a better deal than what you are offering? There's almost always more to the situation. These are the questions ING's Investor will be asking them.
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By the way, welcome to our site. I think you will like it here.
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Permalink Reply by Mark Diebold on
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Hi Bryant, thanks for getting back to me. My offer was actually below market because I don't charge the borrower a fee - I get paid on the spread. But the value in my service comes from the fact that I immediately make a cash offer to initiate the process; this gets the property sold in 30-60 days. ING just said they would not sell short and allow investors to flip for a profit - period. Have you not found this to be the case? I'm sure my "fair" offer was somewhat biased on my part. In this case, few properties were selling in a 30-60-day time period, so my offer was based on what I felt the property would realistically sell for in 30 days. After 3-6 mos time they will end up netting less than market even if they sell at "market" - some in this area have been available for over 12 months. So actually, my offer was fair market less the months of holding costs that either I or ING would eventually end up paying.
Beyond that, if the property sells at current market the owner is still on the hook for the full deficiency and I really have not helped them avoid bankruptcy. The property did not need excessive work - just some updating, wallpaper removal, paint and freshening up. Definitely things that needed to be done to bring it to market standards before it would stand out as a viable option for someone's home. Do they have issues with someone buying it to rent out for cash flow? That's an opportunity for even greater return over a couple years, just not what I'm doing right now. But I got the feeling they only wanted to sell to the next occupant.
Have you had any luck coming back to them at a later time to see if they still feel the same? I appreciate your insights into working with ING! -
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Mark. For the lender/investor it's all about the NET. They are only willing to go so low. In most cases even if they could they can't because of the guidelines that have been given them from their investors. Most of my investors are buying and holding for rentals right now. Prices are so low in my area properties are throwing off good cash flow again.
Definitely going back at a lender later can have a different outcome. Time is the great equalizer when it comes to short sales. -
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Thanks!
Bryant Tutas said:Mark. For the lender/investor it's all about the NET. They are only willing to go so low. In most cases even if they could they can't because of the guidelines that have been given them from their investors. Most of my investors are buying and holding for rentals right now. Prices are so low in my area properties are throwing off good cash flow again.
Definitely going back at a lender later can have a different outcome. Time is the great equalizer when it comes to short sales. -
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