Homeowner · Virginia Beach, VA · Member since 2008 · 91 posts · 9 votes
I saw a listing on the MLS for a property that is accepting all short sale offers. My first question is...can a short sale be wholesaled? If so, do I have to tell the lender or bank that I plan to wholesale the property? I'm still trying to get my first deal under my belt to wholesale and I'm facing many challenges. Any help that you can give...would really make my day!!!
Real Estate Investor · Ocala, FL · Member since 2008 · 742 posts · 463 votes
17y
Contacting the Lender(s):
1) call into the customer service dept. and request the fax number to send the Authorization to Release Info. We also request the short sale requirements at that time. Some lender(s) will tell you then and some will wait until your Release has been entered. We also request a Payoff. Most lenders will tell you it takes 48hours to input your release.
2) call back in 24hours. Check to see if the Release was entered. If yes, then get the fax number to send in the short sale package. Also ask for the phone/fax numbers for the short sale dept./ loss mitigation.
3) send in short sale package. Call to make sure they received the FULL package. Most lenders will tell you to wait for several days for the package to be entered into the system. Once the package is entered into the system, check to see if they need anymore paperwork.
4) tell the lender that they MUST call you to set up the BPO/Appraisal. When they set it up, be there.
5) after the BPO has been entered into the system than most lenders will assign a negotiator. Keep up with this person, check back OFTEN. They will either take the amount you have offered or they will counter.
6) the FUN really begins. Work back and forth with the negotiator till you both agree on an amount that is fair.
7) once an amount is agreed upon, get the lender to fax a statement on the release.
8) close the property.
These are the basic steps to a short sale. IF any questions arise, just ask...
Real Estate Investor · Ocala, FL · Member since 2008 · 742 posts · 463 votes
17y
Items of special interest. Here are some items that over time we have found that have made our lives easier and have gotten better results.
1)Affidavit- We have a form that tells some important things and have every homeowner sign. a) The homeowner will not make any money from this transaction. b) We are an investment company and are attempting this transaction to make a profit. c)
The home owner gives us permission to market, list for sale, enter into contract and sale the property to a third party FOR PROFIT. d) Transaction is depending upon short sale approval by all lenders. Just to name a few
2) We also put into the contract to purchase. a) Depends upon short sale approval b) We are allowed to market, list, and enter into a contract to sale the property to a third party.
3) Be willing to spend large amounts of time to each property. Some lenders will take forever. You will also find out, that some workers for the lenders do not tell you the full truth. If you find this is happening, get off the phone and call back later. And the last item about the lenders- call,call,call. Do not wait for them to call you.
Thanks Cross Wind. Great info. Here are some updates which might help some beginners.
I was just able to get my extension but Homeeq really busted my chops.
I dont know if it was me, the atty general or a combination of both but it worked to delay the auction. once I got approval letter they tried to make me close in 2 weeks.
They told me they wouldnt guarantee anything untill 48 hours till auction.Wednesday night before Tksgiving they said for me to get an extension I would need to wire them 2800 , a comment letter, a GFE , a 1003 App etc. This at 8:00 before a holiday by MOnday. My Buyer hadnt even done an appraisal yet.
I was able to get the paperwork done but did not have confidence in it, so I was able to get my buyer to wire to the lender monday. Not trusting HomeEq, I sent confirmation and called the directly. They said no guarantees still the day before the auction and that my money was non refundable. And no proof of wire yet and they were now not set up to recieve it and probably decline it. Dont ever trust them.
I then called the Attorneys handling the auction. . Guess what he told me. That Friday they contacted him ot postpone auction. I had even called them friday and they said nothing will be done untill I get money in.
I think they were busting my chops to see if we were real.My next step is too be able to switch my contract over to new buyer. Couldnt do a back to back because they had seasoning issues and not enough time to switch banks. He is working it out of closing.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Originally posted by crosswind_:
Actually "seasoning" is not really a problem to often. If you state from the beginning No Fanny/Freddy it wipes out most of the problems.
I and several others will disagree with this statement. Now more than ever, it is a very big and common problem.
View this thread for chatter on the subject of seasoning:
http://biggerpockets.com/forums/49/topics/24285
Residential Real Estate Broker · Round Rock, TX · Member since 2008 · 8 posts · 0 votes
17y
The bank will not need to qualify you. All they will need is a prequalifying letter from your loan officer, hard money lender or private investor. This should also be included in your short sale package.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Originally posted by Ruben Ortega:
The bank will not need to qualify you. All they will need is a prequalifying letter from your loan officer, hard money lender or private investor. This should also be included in your short sale package.
What does this have to do with assigning a short sale contract? Not sure what you are trying to say here.
Real Estate Investor · Vancouver, WA · Member since 2008 · 387 posts · 8 votes
17y
If you're reading this topic, you need to run out and buy
"Short-Sale Pre-Foreclosure Investing: How to Buy "No-Equity" Properties Directly from the Bank -- at Huge Discounts (Paperback)" Run to your computer anyway to buy it on amazon.com or elsewhere online. I bought it at B&N from the store since I got a giftcard for christmas from a lazy person so I had to pay $25 instead of $15. However, it will probably be worth way more than that as it is written by the queens of short sales. Its one of those rare books that is detailed and gives you step by step instructions, not just a vague overview.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
16y
Originally posted by J O:
I know this is an old thread. Crosswind, I didn't see you putting the property under contract. Do I miss something?
Just this:
Originally posted by James Ward:
...
2) We also put into the contract to purchase. a) Depends upon short sale approval b) We are allowed to market, list, and enter into a contract to sale the property to a third party.
....
Investor · San Diego, CA · Member since 2008 · 160 posts · 35 votes
16y
After speaking to multiple attorneys regarding the Wholesaling of Short Sales, they all agree that this type of investing, unless you disclose to the bank that you are purchasing the property at X value and selling the property at Y value within Z amount of time, is bank fraud.
If you disclose to the bank that you are purchasing the home for $100k, and selling it 24 hours after closing for $110k, and have the bank sign that disclosure, then you should be safe... My question is, why in the hell would the bank sell the property to you?!?
If you disclose that you are purchasing the property for $100k, renovating the property (showing construction bids) for $40k, and then selling the property 45 days later for $180k, then that is something that the bank may accept...
The attorneys that we work with in San Diego have all been involved in cases where "investors" have been contacted by the FBI. When Title changes, along with the sale value of the property within a very short time (and the bank has forgiven any debt, ie a Short Sale), then you may need to provide written authorization to the FBI on your disclosures directly to the lender (and if the bank accepted any federal funds - TARP Funds, then the FBI would be interested in why an investor is benefiting from tax payer funds), and the chances of a Federal Sentence are definitely not worth Wholesaling a Short Sale...