July 21, 2006
Multiple Liens
I have just picked up a client that has a new house (no repairs needed) 3years old. they have 2 mortgages, both with the same mortgage company
1st - $119,000 - ARM @ 13.75 tops out at over 16%
2nd - $ 21,000 - 9% fixed
what is the best aproach with this company to negoticate a short with the 2nd, and possibly the 1st, without tipping them off that they have both?
The problem with having a client that has 2 mortgages with the same company is that the company does not care much about the 2nd. The first is their focus. I would just work the 1st and if they say what about the 2nd just tell them all you are interested in is the 1st the the 2nd is not your issue. Then see if you can short the 1st dedending on the value of the property.
Paul Wells
Posted by paulwells at 5:36 PM | Comments (0)
April 30, 2006
How Much To Offer A Bank
What percentage should you ask the bank to accept on your "short sale?"
Example: ARV is $200,000, $190,000 mortgage, and
the property needs $5,000 in
cosmetic repairs.
Obviously, there is no equity in the property and therefore the only way to do a deal is a short sale. So what and how do you ask the bank?
Mr. Loss Mitigator I will offer $114,000 (which is 40% of $190,000). Will the bank discount the note up to 40%? If not what is the percentage they will accept? Or is everything depended on the banker's appraisal (BPO)? I have read that you should only buy properties 65% or less of market value so that you can: 1) wholesale it or 2) sell it. Thank you. John
My rule of thumb of beginning offers is 60% of retail minus the repairs needed when making your initial offer to loss mitigation. Also this number is flexable based on a number of conditions-like the market and whether it's soft or strong. You'll want to experiment on your offers. Also figuring in is going to be how much inventory the bank is currently holding in it's REO (real estate owned) Department.
Posted by paulwells at 12:49 PM | Comments (0)
February 21, 2006
How do I identify myself to Lenders
When you first approach a lender who is foreclosing on a seller, how do you represent yourself? Do you immediately identify yourself as an investor, or do you say that you are consulting with your client, the owner?
This is a good question and one I get asked a lot. When I am working with people in foreclosure I am doing just that: Working with people in foreclosure. So when I am talking to the banks loss mitigation department about doing a short sale that's what I tell them.
"Mr. Lender, My name is Paul Wells and I am a friend of the Smiths and I'm helping them with their situation. I have gathered together all of the paperwork that you have requested and would like to get the package to you. Would you prefer it faxed, emailed, or sent?"
It is very rare that I will ever tell a lender I am an investor the 1st time I work with them.
Posted by paulwells at 8:20 PM | Comments (0)