This is another Short Sale succesfully closed by the experts at ShortSaleASAP team. This home was located in Coto De Caza and was orginally purchased in September 2005′ for $1,235,000. From 2005′ until April of 2008′, this home lost about 27% during that period of time.
This estate property was was a large 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 informed the homeowner at the time, that we could not guarantee success for there was little time left to work with the mortgage banks, but we would give it our bet efforts. The next few days were bery intense, but 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 3 weeks, 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. In addtion, they were able to live inthe home suring this process rent free, and their 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.
If you have any questions, please fee free to call the OC Short Sale Team at: (949) 388-3396 or email at: Info@ShortSalesASAP.com
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