They both think that they are entitled to the proceeds of the sale. This is the most common short sale problem. Today we’ll give you an example of how we solved this problem.
For example, we had a short sale with a first mortgage, a second mortgage, and a third lien. The third lien was an old credit card judgment. It had to be paid off to sell the house. Here is what happened.
The first mortgage was only willing to pay $3,000 to any second mortgages or liens. The second mortgage wanted $4,500. The credit card judgment wanted $5,000. How were we going to get the extra money for them?
I had to escalate the file with the first mortgage. I told them that they had two options.
Option one: Pay the first and second mortgage what they wanted and net X from the short sale.
Option two: Foreclose and net $15,000 less than X. Yes, my projections showed that they would lose an additional $15,000 if they rejected the short sale.
I have a calculator that puts all these numbers together. In addition, I have the proof to back it up.
Here is an example of that proof. There was recent short sale where the first mortgage stubbornly refused to give enough money to the second mortgage.
As a result, they foreclosed on the house and sold it for around $43,000 less than the short sale price.
I found out about this house because I met the first buyers at an Open House. They were trying to buy a short sale and were offering $272,000. The first mortgage was RBC, owed $337,500.
The 2nd was Bank of America, owed 70k. The agent submitted the short sale offer to both companies. RBC said they would only pay $1,000 to the second mortgage. The second mortgage wanted more.
The short sale dragged out for months. Finally the buyer paying $272,000 walked. The listing agent put the house back on the market. The housing market had declined. Now the only offers she could get were around $230,000. The house ended up selling for $229,000.
RBC was greedy and wouldn’t offer enough money to the second mortgage. As a result, they lost around $43,000. Was that a smart business decision? I don’t think so.
Now, back to my short sale story. I sent this and several other similar examples to the people at the first mortgage company. They agreed to pay the second mortgage $3,000 and completely pay off the credit card judgment.
Everyone came to an agreement and the sale closed. The seller was able to wipe out over $70,000 in upside down debt and move on with her life. Thinking about a short sale? Visit the Chicago short sale expert at www.ShortSaleSuperMan.com for more information on short sales.
I can help you short sale your property and get back on your feet. Send me an e-mail at email@example.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (312) 953-6725
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Thinking about a loan modification? Our Chicago loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.
Thanks for reading this, Phil Buoscio.
Phil is a Real Estate Agent at Better Living Realty – Buoscio Brokerage, Inc.. Chicago Short Sales Realtor:
Phone: (312) 953-6725. firstname.lastname@example.org.
View My homes for sale at www.BetterLivingRealty.com.
Phil Buoscio specializes in loan modifications and short sales in Chicago Illinois. Chicago Loan Modification Help. Chicago Short Sales. Chicago Short Sale Realtor. Chicago IL Short Sales. Chicago Realtor.
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Phil Buoscio, Better Living Realty – Buoscio Brokerage, Inc., and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why?
Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit.
However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification.
We do not recommend that you stop paying your mortgage, because this will cause damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision.
This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.
You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale.
The views expressed here are Phil’s personal views and do not reflect the views of Better Living Realty – Buoscio Brokerage, Inc..
This information on How To Solve The Most Common Chicago Short Sale Problem is provided as a courtesy to our viewers to help them make informed decisions.