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It's not clear if the paperwork is adequate for the short sale either, as you point out. If the servicer can't foreclose on the house because it's not clear who the mortgagor is, then why would the servicer be able to accept a short sale on behalf of the mortgagor? I would imagine that banks are having to suspend short sales as well, or at least be more cautious with them. On the other hand, it's also entirely possible that one of the reasons that a short sale takes so long in the first place is that they're trying to get all the paperwork in order.
Also, why are you still paying your deadbeat landlord? If he's in foreclosure, what's he going to do, evict you?
Thanks, Roberto, for your lengthy reply. Unfortunately, however, you didn't answer my question. Do you think banks will be more interested in short sales now that the foreclosure option is not so viable?
Corntrollio, thanks for your reply, too. You asked why are we paying our landlord? Because we have an agreement, don't want to be a deadbeat tenant, and I don't want to be evicted.
tenant in foreclosed house says
Thanks, Roberto, for your lengthy reply. Unfortunately, however, you didn’t answer my question. Do you think banks will be more interested in short sales now that the foreclosure option is not so viable?
As Roberto has said, and from reading your previous postings, you first need your landlord (owner) to agree to short sell the home to you before the bank will even review it. If your landlord has not agreed to short sell the home to you subject to lender approval, your only other choice is to go to the courtside steps during foreclosure auction with cash to buy the property. If that does not go well, you will have to wait until the bank decides to list it on the MLS with an RE agent and bid against everyone else. By then, you would have been evicted by the bank unless you have a valid lease. Then they will honor it until your lease is up.
If the landlord (owner) agrees to short sell to you and the bank finds out you are the tenant, I would see this as major leverage against you to totally rip you off for this property since they'd assume you don't want to move.
The banks have always preferred short sale because statistically they get more money from from a short sale versus a foreclosure. But the finances have to make sense to them. They're not in the market to lose money.
kronicade
2010 Oct 21, 7:15am
The Short Sale is completely separate from a foreclosure and problems with foreclosures will not carry over to short sales.
I think robertoaribas did answer the original question very well. He just explained it instead of saying yes or no.
Why are you paying your deadbeat landlord again?
There has been a lot of speculation about Foreclosure-gate's effect on home prices, but I haven't seen anything on its effect on the willingness of banks to close short sales. Our rental is "in foreclosure", meaning, it is in the process of being foreclosed upon (we live in a judicial state) and the lender is JPM. We put an offer on the home, but nobody has accepted it and the bank has not contacted us or the landlord. Meanwhile, the landlord is taking our rent without paying the mortgage. I'm not even sure he is paying insurance or property taxes!
With all these clouded titles, why aren't banks suspending short sales, too? Maybe the question is really, "why would any delinquent homeowner participate in any short sales offers anymore?" They are making bank and they don't want the gravy train to end by choice, right?
Please reply with your opinion about whether, in the short run (especially), you think banks will increase or decrease their number of short sales.
#housing