Negotiating with lender for balance decrease?

Question

If I have a contract on a property is it possible to go to the lender and negotiate the balance down for a cash payoff?

The note is incurring daily interest, property is in bad shape, and lender would most likely have to evict people currently living there- possible negotiation points?

Anyone have experience doing this?

Brett Goldsmith · Answer

If the home has equity a short pay is likely not possible. If the house is upside down then it may be possible depending on account and borrower circumstances.

Greg Dickerson · Answer

The owner needs to agree first as there are legal and tax consequences for a short sale. As such you can not go to the lender on behalf of the owner without written authorization. That being said It depends on the lender and their requirements. If it’s a local bank they can make the decision internally. If it it’s a larger bank or loan servicer they have very stringent requirements for a short sale.

Jacob Kline · Answer

@Jacob Kline and what I mean by “calculating #s off of the payoff from contract price” is that I’ve got a purchase price written in the contract as:

“Buyer and seller mutually agree that the purchase price will be the combined of payoff plus $amount net to the seller”

Jacob Kline · Answer

@Greg Dickerson @Brett Goldsmith thanks for the replies guys.

Basically my issue is that I’ve calculated my #s on the deal based on the payoff from when I first put it under contract and didnt know it would incur daily interest. At this point just waiting on the payoff statement to come back from lender.

Do either of you know what a typical daily interest rate would be on a preforeclosure?

I just would hate to keep putting time into the deal while interest could possibly go above my contract price. Maybe overthinking but I’d appreciate any advice