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ECONOMICS 101 - SHORT SALES - WILL THE LENDER SHARE THE LOSS
I had just too many borrowers that "should have known better" in the office this week - so I feel very conservative just now - just to the right of Bill O'Reilly.
We do a lot of short sales in my law and title agency offices. They come in from all sources - Realtors, referrals, lenders, friends, developers. Some borrowers have one investment property and some have eleven, and all the numbers in between. Most are upside down and don't want to put more good money (if they have any left) into a bad investment.
When they ask us to negotiate with the lender to lower the payoff we naturally ask them what their financial situation is today and what savings and other credit they have that could be used to pay the shortfall in the cash flow of the property. We also need to know what resources they have to pay the resulting cash needed to clear title at the closing.
It is just amazing the number of borrowers that have other assets (ok, not necessarily "liquid" assets) and are just belly aching about their "financial indigestion". "Get the lender to share in my loss," they ask. I then ask, "What was your arrangement with the ... more
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