We're seeing quite a few foreclosures in our area on homes that had reverse mortgages. We've been told by our Realtor that the bank's asset managers on these properties absolutely will not entertain an offer less than list price on reverse mortgages, unlike standard foreclosures where they often will consider up to $10,000 below list price. As a result, these properties can sit on the market vacant for a LONG time, possibly going through price drops every six months or so. It seems like a big waste and I'm curious as to why the bank would hold on to a deal that long simply because it was a reverse mortgage. Should we push our Realtor to submit an offer below list price anyway? Has anyone else had experience with reverse mortgage foreclosures? I'd like to figure out how to get them to move faster.
Are these REO homes or short sales?
They generally want 95% of appraised value minimum on short sales. List price does not indicate what appraised value is. So get in there and find out what the appraisal came back at.
I have no actual knowledge but I might speculate it's a difference in how the two mortgage products are insured. If they have insurance on the conventional mortgage they might be more open to a lose.
It's quite simple.....the lender can Not accept less than 95% of a current FHA appraisal(both for a short sale and for at least for the first 6mo.s as a REO)....this is a requirement of the FHA, who insures the RM's.
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