This is another interesting Short Sale success story that closed in September 2008′, that was completed by the OC Short Sale Team. The property was located in Ladera Ranch in the prestigious community of Covenant Hills.  The house comprised of 4 bedrooms, 4 baths, with 3 car garage and 3,600 square feet of living area.

This property sold for $1.2 Million in December of 2006′, right around the peak of the market, and was worth about $890,000 in September of this year.  The first Mortgage was hald by EMC mortgage, and the second Mortgage was with Homecomings.  The balance on the 1st loan was approximately $870,000 and the 2nd trust deed note balance was $240,000, for a total loan balance of $1,110,000.  That means the property was upside down by $220,000 at the time the homeowner came to us requesting a Short Sale.

EMC was very difficult to work with on this short sale for the BPO they ordered came in high.  The 2nd mortgage bank, Homecomings, also was requesting a 10% pay-off for their 2nd trust deed note, which was $24,000.  We received an offer for $850,000, and after several counter offers, were able to bring the buyer up to $875,000.

After several months of back and forth negotiations, we persuaded EMC to conduct another BPO, which came in at a more realistic price of $900,000.  During the same time, we were able to convince the 2nd mortgage lender to accept just 5% of their outstanding balance, equal to $12,000.  EMC agreed to pay the back property taxes of  $6,000 and they ultimately accepted a discounted pay-off of $795,750.  This resulted in a pay-off of 91.5% to the 1st mortgage lender.

Everyone was better off in this short sale transaction as compared to a foreclosure.  The 1st mortgage bank received 91% of the original balance.   If they denied the short sale, they probably would have only received 80% from an REO sale 8 months into the future.   The 2nd mortgage lender received $12,000, and if the 1st foreclosed, the 2nd would have been wiped out.  The homeowner avoided foreclosure, and was able to sell their home without Bank Foreclosure signs posted all over the property.    In addition, their credit will be more easily corrected/improved down the road, compared to foreclosure. And within 2 years, FNMA will underwrite a new mortgage loan, versus having to wait 5 years for such a privilege if they chose foreclosure.

The ShortSalesASAP group of professionals specialize in short sales in Orange County and throughout southern California. We are determined to close each short sale we take on and are great negotiators.  We know what banks expect in terms of negotiations,  packaging, settlements and more.  For questions abut short sales, or other possible solutions such as deed in leu of foreclosure, loan modifications, and more, please give us a call at:  949-388-3396.