We are show casing one of our many Short sale successes in Orange County, CA. The exact address and buyer seller details will not be published to protect their privacy.
The home was located in Coto De Caza and was a beautiful 5 bedroom, 3 bath, 3 car garage estate with a golf course view. At the time, this home was worth $910,000 (April 2008′). There was a 1st Mortgage with Saxon Mortgage with a total outstanding loan balance $1,140,000, and this lender had filed Foreclosure about 4 months earlier. There was also a 2nd Mortgage with Homecomings with a total outstanding loan balance of $150,000 on the property as well, plus $9,000 in back property taxes. This resulted in a total outstanding debt of just about $1.3 Million The homeowner first came to us on a Thursday afternoon, desiring a Short Sale, and he told us that the Foreclosure Trustee Sale was next Tuesday at 1PM at the Courthouse steps in Santa Ana – just 3 working days away.
We told the homeowner, that we could not guarantee success, for we had very little time left to work with the mortgage banks, but we would give it our bet efforts. To make a long story short, in the first few days, we were able to convince the 1st mortgage bank to postpone the foreclosure sale for 1 month. During the next 3weeks, we gathered and packaged the short sale documents for both the 1st and 2nd mortgage banks – submitted these packages and got the negotiators assigned – we obtained the BPO/appraisal for both lenders. The week before the postponed foreclosure sale, we obtained a good offer to purchase from another buyer, this time for a fair price of $900,000. We were again able to postpone the foreclosure sale one more month.
During that next month, we conducted expert negotiations in order to get the loan balances reduced to allow the purchase of the property. The 1st Lender, Saxon, eventually agreed to a discounted settlement of $800,000, which represented a 29% discount from the total outstanding loan balance owed… plus we convinced the 1st Mortgage to pay all of the back property taxes. The 2nd lender, Homecomings, agreed to a settlement of just $15,000, for an outstanding loan balance of $150,000, which represents a 90% discount. Sounds hard to believe I know, but the 2nd mortgage was faced with the tough decision of either accepting this massive discount, or receiving nothing from the eminent foreclosure sale.
The grand total outstanding mortgage debt was $1.3 Million before the short sale, and after our expert negotiations were completed, were able to negotiate this debt down to $815,000 plus misc costs, in order to close the short sale purchase escrow. It was a win win for all. The 1st mortgage bank got 70% of the original balance plus arrears. If they were to foreclose, they probably would have only received 65% from an REO sale 6 months down the road. The 2nd mortgage lender received $15,000, and if the 1st foreclosed, the 2nd would not have received a dime…
The homeowner also won, in that they were able to sell their home in a relatively dignified manner, versus being evicted by the sheriff in a bank foreclosure. Plus the credit will be more easily corrected/improved down the road as compared to a foreclosure. Plus within 2 years, FNMA will underwrite a mortgage loan for them, if they so choose, versus having to wait 5 years for such a privilege if they chose foreclosure.
The Team at ShortSalesASAP is one of the leading short sale experts in Orange County. To be great at short sales, a firm needs to be dedicated full time plus, to this endeavor, for bank negotiations are very trying frustrating and time consuming. Also, an expert short sale team must be cunning negotiators and know what banks expect in terms of negotiations, packaging, settlements and more. Plus there is no substitute for results. Our team at ShortSalesASAP.com has over a 90% success rate for all short sale clients we have accepted.
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Short Sale Information,