All Forum Posts by: Mark Elegeert

There are a couple things you could do. Two quickly come to mind if your numbers work out. Buy the property "subject-to" the existing mortgage assuming there are no other liens. In this case you would have to pay the back payments so it doesn't go into foreclosure. Another option would be to buy it for the payoff amount. And it really depends what you want it for. Do you want to flip or buy and hold?

Lenders don't go off of ARV, they use an "as-is" value. If the "as-is" value is less than what is owed, it would be a short sale candidate.

Example :

Fair market "as-is" value: $55,000

Owes: $60,124

I called HUD and got the info. As per Mortgagee Letter 2008-43 an arms-length transaction in my situation is allowed. I can, as the buyer, submit and negotiate the FHA short sale directly with the seller's lender.

Now the problem will be getting the seller's lender to understand this!

The Mortgagee Letter can be found here:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee/2008ml

Hello all,

I know there have been some changes to FHA short sale guidelines lately but I was under the impression that they were rescinded. Nationwide Advantage Mortgage just told me that I couldn't negotiate an FHA short sale if I am the buyer. I can still go through the realtor that the property is listed under, but I was hoping someone could shed some light on the guidelines.

Currently, is it really not legal for the buyer to negotiate an FHA short sale?

Thank you,

Mark

@K. Marie Poe

Could that have something to do with some banks no longer having the note origination paperwork so they can't foreclose but they will do a short sale?

Just to clarify the 4506-T is a request for tax transcript.

If you are asking if they will accept the transcript without the 4506-T, I'm not sure. My associates and I usually do the 4506-T and the lender is the third party that the transcript gets sent to. It is a fairly simple form. I would suggest that if you want to cover your bases just send both.

Yes, most lenders include the 4506-T form as a requirement in the short sale documents.

If you are flipping you shouldn't have to worry about refinancing. The focus should be on selling.

Is your family member not funding the whole $87k?

Don't be discouraged if it doesn't work out. If it goes all the way to a foreclosure auction you will have the upper hand because you have been at the property and have knowledge of the actual value.

Sometimes if the lender denies your offer for short sale saying is too low you can still get it at a lower price at auction.

This is due to lenders having loss mitigation(short sale) and foreclosure(auction) departments that have different motivations and policies.