Preforeclosure-Probate-Shortsale....ALL in one!!!

[Sean Dougherty]

I have a property in the pipeline where the owner is deceased, and property is in preforeclosure. No equity in the home. Would the foreclosing lender allow me to pay the PR of the estate in order to go through with a short sale?

[Ken M.]

Quote from @Sean Dougherty:

Quote from @Ken M.:

Quote from @Sean Dougherty:

I have a property in the pipeline where the owner is deceased, and property is in preforeclosure. No equity in the home. Would the foreclosing lender allow me to pay the PR of the estate in order to go through with a short sale?

Lenders don't allow the owner to benefit from a short sale. You'd likely get into legal trouble. No money here. move along.

 I have seen lenders allow money to be paid to comissioners as well as special administrators. Why not to PRs? They are not the owners of the property. Rather they are acting like a comissioner in order to sell the property and avoid the foreclosure. 

PRs can get paid a "reasonable" fee, but they are fiduciaries to the estate. More importantly, it's against the law for an owner to make money on a short sale on a loan backed by the US govt like VA or FHA loans. And since the bank loses money on a short sale, why would they allow a borrower to benefit anyway? Short sales are heavily regulated.

Although I may have misunderstood your question. If your question is, "can I buy a property that is in probate as a short sale, and pay the PR a fee". If the PR is a real estate agent and has listed the property, you probably could. But the bank will determine what that fee is as a condition of giving the short sale. Keep in mind, the bank is owed money and they have the right to collect the full amount even if the value of the property is less than what it would sell for on the market. A short sale is a voluntary act by the bank. It is not required. People have gone to jail playing games with this one. Be careful and make sure you talk to a local attorney about specifics.