- New Haven, CT
- Votes |
My grandfather passed at the end of August with a reverse mortgage in excess of $850k on his home that was recently appraised at $585k. HUD has informed us that they'll accept a short sale for 95% ($557k). I had the top producing agent in the area inspect it and he told me I shouldn't pay over $475k and should try and negotiate a reduction. Normally I'd just tell my dad and aunts (the heirs) to just let the bank take it back, but the property is oceanfront, has some sentimental value, and would actually cashflow well as a vacation rental (assuming I could actually purchase it at $475k).
I think there is a lot of confusion regarding short sale negotiations with reverse mortgages because the negotiation is actually with HUD and not the bank. As I understand it, HUD provides the difference between the short sale price and the amount owed to the bank. Is negotiating with HUD much different from negotiating with a bank for a reduction?
Has anyone ever successfully done something like this?