I've heard that on a short sale, a bank will accept a certain percentage of their appraised value, which varies depending on several things, including whether the existing mortgage that's in default is FHA.
What's the percentage for a property with an existing FHA mortgage?
How do I find out if it has an FHA mortgage?
What other factors will influence the bank's required %?
btw there is NOTHING short about a short sale
A FHA short sale has a particular process. After the owner gets qualified, the bank will issue an Authorization To Participate which will establish the acceptable price, prior to listing. This is if the person handling the short sale knows what they're doing. Other than looking at the original mortgage, you can't tell if it's FHA, unless the listing agents discloses it, which they should.
This short sale did not have a bank-approved price prior to listing, although the owner / seller had submitted his docs before I made an offer, perhaps prior to listing. It took over four months for the bank to send out an appraiser and give a value for the property. So based on what you're writing, it's not a FHA mortgage.
Is there any rule-of-thumb for what % of the appraised price a bank will accept? And what is that based on?
Just an update ... spoke with the agent and he says that it is an FHA mortgage that the seller has. So there's a misunderstanding somewhere.
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