Can the lender reject a short sale offer?

hi jim
welcome to the forums.

hud allows a lender to reject a short sale or a pre-foreclosure sale offer under certain conditions. if the property is not owner-occupied and if there is a second mortgage loan taken against it, then hud does not allow a lender to conduct a short sale.

generally, lenders agree to a short sale when they find out that the borrower is unable to make the entire mortgage payment. the short sale will allow him to receive at least a portion of the unpaid loan balance, if not the total outstanding payment.

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regards,
samantha.

Hi

Can i have more details on it

Thanks in advance

Nics

Hi Nics

At times lenders are willing to accept a lesser amount than what they should receive from borrowers. This is mainly done to avoid the costs of conducting a foreclosure. This is where a short sale comes in. It helps the lenders get back a larger portion of what they had offered as loan, at least an amount equal to the value of the home. At the same time, it gives the borrowers the opportunity to get rid off the amount of unpaid balance which is greater than the property value.

A short sale saves costs like the attorney fee and those associated with the eviction process, damage to the property and costs related to the resale of the property. A short sale is a better option compared to a foreclosure or a bankruptcy. These will affect your credit score more than a short sale.

But in case of second mortgage on the property it becomes difficult to conduct a short sale. This is because the second lender does not wish to lose his interest in the property and therefore he would not remove the lien from the property.

Regards,
Caron.

Hi,we have a house that was 300,000 when we bought it,now it is 160,000,
but we owe 260,000.We talked to our mortgage/bank chase,they said no,
we could let you pay half of your mortgage payment for 3 months,wright after
those 3 months,you will have to pay the accumulated amount balance,we said
no thanks.Now we will have to stop paying the mortgage.Why the bank does not negotiate we us better than make us go to short sale or foreclosure?

Hi Mathews,

The bank had offered you the option of forbearance. As far as short sale is concerned, lenders do not accept it until you are not late in payments for at least a month. But deliberately stopping the payments will not help you in negotiating with the lender. You will have to give the lender genuine reasons for stopping the mortgage payments or else he may not accept a short sale.

Thanks,

Jerry

has anyone ever heard of a mortgage company issuing a ten year unsecured note for some of the remaining balance from a short sale???

After a short sale, a lender can demand the deficient amount from you. If you cannot pay it, then the lender may either garnish your wages or place lien on your property. But I haven't heard of mortgage company issuing a ten year unsecured note.

I own a house in Iowa in which my parents co-signed for me. Unfortunately I have not been able to make payment. I have some equity in the house since I own it for almost 5 yrs now and never touched the equity. I have just received my last notice of late payment and that they will begin the forclosure procedure if i cannot come up with the balance owe.

What I am curious to know is does Iowa allowed for deficiency judgement? If yes can they seek that from my parents whom reside in CA? I am pretty sure that the house will sell for what I owe on the house but I am just making sure. Thank you.

can i shortsale my house which is under fha loan, will i pay the balance on the property

ruby, you need to discuss the possibility of a short sale with your lender. they'd have the final say in whether it would be acceptable or not. i don't think you'll find that your having an fha loan will have any effect, though.

you may wish to have someone with legal expertise to represent you in this process - at the very least, find a real estate agent with some valid expertise in the short sale process, so that you will know, going in, what kind of information you need and can obtain.

The lender can accept or deny any offers as they seem fit. The lenders have a net figure that they need to get in order for the transaction to make sense to them. You probably want to hire a professional to work on this for you. In most cases they will have experience with your lender and be able to get to the banks bottom line with out all the hassle that you are putting on your self right now.

there are realtors who are skilled in the short sale scenario; one sure way to find one is to check their advertisements. they wouldn't dare say they had some expertise without actually having it.

Realtors are good at selling the houses but they dont typically have the time to spend on negotiating with the banks.

i won't disagree with that, brad; what i'm addressing, more so, is that a realtor who knows how to do his or her homework regarding the potential of a short sale will be a lot more complementary than one who is clueless. a realtor who has no experience with them can really gum up the works.

Youve got a point. The price the realtor puts on the home will have a lot to do with what the banks are willing to accept.