Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
Hi all:
Has anyone done a short sale on a property owned by an estate? How about with a mortgage owned by the VA (estate or non estate)? Just trying to find out what to expect. Are short sales where the owner is deceased necessarily easier? Are VA loans easy to short? I have one where the mortgage is with the VA and the property is owned by an estate. Thanks.
Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes
16y
Originally posted by Ibrahim S:
Hi all:
Has anyone done a short sale on a property owned by an estate? How about with a mortgage owned by the VA (estate or non estate)? Just trying to find out what to expect. Are short sales where the owner is deceased necessarily easier? Are VA loans easy to short? I have one where the mortgage is with the VA and the property is owned by an estate. Thanks.
VA and FHA are under the Housing of Urban Development (HUD) so you would really approach a short sale with VA much like you would with a conventioanl. There will will ba servicer/lender you would begin with.
As far as a short sale within an estate, are you saying the borrower/seller is deceased? Short sales occur because the borrower is trying to workout a short pay with the lender in order to reduce the losses and negative reprocussions. In order for the short sale to make sense, the lender and borrowers should benefit over a foreclosure scenario.
So, if an estate owns the title and the borrower is deceased, there is no benefit to him/her. If the setate has title and the beneficiaries defaulted on the loan, then it is likely a foreclosure or deed in lieu scenario.
If, however, the title is in an estate like a trust and the borrower is not deceased, then you would pursue it much like you would an other short sale.
Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes
16y
Originally posted by Ibrahim S:
Hi all:
Has anyone done a short sale on a property owned by an estate? How about with a mortgage owned by the VA (estate or non estate)? Just trying to find out what to expect. Are short sales where the owner is deceased necessarily easier? Are VA loans easy to short? I have one where the mortgage is with the VA and the property is owned by an estate. Thanks.
VA and FHA are under the Housing of Urban Development (HUD) so you would really approach a short sale with VA much like you would with a conventioanl. There will will ba servicer/lender you would begin with.
As far as a short sale within an estate, are you saying the borrower/seller is deceased? Short sales occur because the borrower is trying to workout a short pay with the lender in order to reduce the losses and negative reprocussions. In order for the short sale to make sense, the lender and borrowers should benefit over a foreclosure scenario.
So, if an estate owns the title and the borrower is deceased, there is no benefit to him/her. If the setate has title and the beneficiaries defaulted on the loan, then it is likely a foreclosure or deed in lieu scenario.
If, however, the title is in an estate like a trust and the borrower is not deceased, then you would pursue it much like you would an other short sale.
Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
15y
What if it is a VA loan through B of A and the seller is a vegetable? A realtor has it listed for x price after a large drop in price. If their lawyer accepts my offer, does the bank have any reason to not forclose? Sorry, I have done a lot of deals but never a short sale.
Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes
15y
If the seller is alive, then he should qualify for a short sale. Being disabled will fall under medical for reasons for default.
It being a VA loan, which guarantees BOA to be covered on loan losses up to 20%. In order to get that credit, BOA will have to follow guidelines and one of them being that the minimum net proceeds will be in a certain percentage of the appraised value. This amount is generally between 10 and 14% depending on certain market factors.
So, in my opinion, your spread will be largely dependant upon a favorable valuation from the appraiser.