Short Sale Approved

8 Replies

I have a short sale approved for $335,000 until September 22 2014 for a property in long island NY. Title came with a big surprise of 10 million dollar judgment... and the bank now has a sale date for September 16...

My way out is to by the note for the short sale price, can anyone help? The investor is US National Bank.

Thank You

Rebecca

Originally posted by @Rivi Matalon:

Title came with a big surprise of 10 million dollar judgment... and the bank now has a sale date for September 16...

My way out is to by the note for the short sale price, can anyone help? The investor is US National Bank.

Thank You

Rebecca

 Can you explain what the $10 Million dollar judgement is.  Who does the judgement benefit?  That is a pretty big elephant in the room and thus requires an understanding of it's details.

Further, in regards to "your way out", are you the Borrower or simply an interested Buyer of the property through short sale? What is the FMV of the property?

Did you make an offer and have it accepted to purchase said mortgage for the price you mentioned?

The better the details you can give, the better discussion as to what might be a real solution to any of this or what risks might be present in the deal to stay away from it.

Prelim title should be run at the beginning, before an offer is even made on a short sale, let alone waiting until the end.   It's ridiculous that the listing and selling RE agents didn't know about this before now. I assume you are the buyer, otherwise you would have known.

Thank You Everybody,

The Short sale started 2 years ago, the property was in foreclosure and had a sale date a few month ago. The owner filed for bankruptcy and stopped the sale. The short sale continued and finally was approved last week.  The judgment was placed on October of 2013. Preliminary title ordered at the very beginning.  The owner had a business years ago and final decision in court was giving last year. Judgment of $10,000,000 was granted to the plaintiff.  We are still not sure how they manged to place a lien of such a huge  amount on a property that worth less then $500,000. I found the lien holder, explained him what happened, but he will not release the lien without paying him at least $100,000 even though we have nothing to do with it. My attorney is looking to find documents proving they had the right to place the judgment on the property.   Now, comes a second surprise... Bank attorney managed to lift the stay and now has a sale date September 16.

If the lien holder will not settle for something reasonable and the property will go to auction, we both lose!  

Let this go.  It's over.

The judgement lien holder doesn't have to release the lien, the borrower who the judgement against still owns the property.  The lien holder wants his money and he can attach to all sorts of things regardless of equitable value.  The lien holder will be wiped off the title upon a foreclosure action, that is the only way outside of paying him and getting a release to take care of him. 

If the Mortgagee got a relief of stay, then perhaps sit back and let it run the course and bid at auction.  If it reverts back to the Mortgagee, you already know who that is, call and make an offer.  That's your best bet.

Originally posted by @Rivi Matalon:

Thank You Everybody,

The Short sale started 2 years ago, the property was in foreclosure and had a sale date a few month ago. The owner filed for bankruptcy and stopped the sale. The short sale continued and finally was approved last week.  The judgment was placed on October of 2013. Preliminary title ordered at the very beginning.  The owner had a business years ago and final decision in court was giving last year. Judgment of $10,000,000 was granted to the plaintiff.  We are still not sure how they manged to place a lien of such a huge  amount on a property that worth less then $500,000. I found the lien holder, explained him what happened, but he will not release the lien without paying him at least $100,000 even though we have nothing to do with it. My attorney is looking to find documents proving they had the right to place the judgment on the property.   Now, comes a second surprise... Bank attorney managed to lift the stay and now has a sale date September 16.

If the lien holder will not settle for something reasonable and the property will go to auction, we both lose!  

 what may be reasonable to you may not be reasonable to someone who has a 10 million dollar judgement in their favor. 100k is more than reasonable if you look at it unbiasly. Obviously it's not something you would or should pay but for him to just come off the lien so you can make the deal is not  reasonable at all

Thank You,

Do you know if There is a way to buy the note instead in such a short time?

Is there a way?  Yes.  The owner of the note has to want to sell said note.  Details of that simple idea are a bit more complicated and given the counter-party you mention (US Bank) the chances are not high.  

All things being considered, I would look for it at auction and bid if you like it that much or contact the owner post auction and make a bid.  Let them do all the heavy lifting for you.

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