Distressed seller, who should he call? Non-profits?

By
Real Estate Broker/Owner with Northern Virginia Homes - FRANKLY REAL ESTATE Inc

To all,

I just got a call from somebody that is facing foreclosure. Their house is already listed on the MLS (45 days now).

Their rate skyrocketed (over double the cost of renting).

What should they do? I know that there are systems and processes to mitigate the damage.

  • Should he stop payments immediately?
  • Are there non-profits that he can call to guide him through this?
  • He bought with 100% financing and a $20k seller subsidy! (not from me) and he would take a $40k loss if he sold right now (which he can't do, and I'm not sure a short sale has been approved)
  • Show he file for bankruptcy?
  • Just let it foreclose?
  • How does he get the bank to agree to a short sale?
  • Who can help him renegotiate a more manageable rate with the banks? (not refinance!)
Help!

 Sorry if this was already answered, I'd love advice and links to other blogs.

 
Thanks


Frank    
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Rainmaker
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Paul Moye
Benchmark Realty - Franklin, TN
Broker, GRI, SRES

He needs an attorney, then to talk to the bank.

By the way this guy is what they call in the industry a winning loser. He played the game but did not have the capital to cash out in the end of the game. Most lenders will not work with someone, assist in a short sale, who has done what he has done. profitteering using the bank's money is a risky game and he has lost....he either finds a sucker to buy his pain or follow the attorney's advice.

Sep 12, 2007 02:10 AM #1
Rainmaker
24,949
Shari Posey
Berkshire Hathaway HSCP - Long Beach, CA

Frank,

I would not waste much time on this. I mean, I know you want to help him but he has his house listed with another agent who is the one who is supposed to be helping him. Besides, the chances of his house getting approved for a short sale is slim to none and he probably won't get a loan modification either. He can either take on a second job to help make the payments or get on the track to foreclosure. I agree that he should talk to an attorney.

Sep 13, 2007 11:02 AM #2
Rainer
6,075
Justin Lewis
Lewis Realty - Tulsa, OK
I don't know, I just got back from this years 5 star conference and all the major lenders were stressing talking to the lender!  I believe short sales are possible. 
Sep 13, 2007 12:38 PM #3
Rainmaker
24,949
Shari Posey
Berkshire Hathaway HSCP - Long Beach, CA
I know the lenders say they do short sales but I would be very interested to know the stats on the number of short sales and modifications that actually happen. In the past 6 months I have listed 4 short sales and worked with approximately 20 homeowners to get modifications on their loans. None of the short sales worked out, although that was primarily because nobody in my market will show a short sale to a motivated/qualified buyer; and only one of the homeowners got a modification that resulted in a lower payment. Maybe next year will be the year of the short sale as the market worsens.
Sep 14, 2007 03:19 AM #4
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Rainmaker
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FRANK LL0SA Esq.- Northern Virginia Broker .:. FranklyRealty.com

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