Offer to Buy Property To Be Surrendered

[justbroke]

Just got a call. Someone wants to buy my rental unit that I'm surrendering. I think it's best not to sell it or even think about "short" selling it, as I don't need the blowback from any deficiency.

What do you all think?

[BROKENN]

Hi, I would give the potential buyer the MTG Co name and tell them to ask about the address. Maybe the bank would like to sell it.

I have had a lot of people interested in my house since they saw the moving truck. I did just that. Especially since I don't want to give out my personal info

[HHM]

As there is no benefit to you for selling vs surrendering (especially if the sale would be a short sale), there is no reason you should follow through. Like Brokenn said, if this person want's to do all the leg work, fine, but no reason for you to do anything.

[justbroke]

That's what I figured. Thanks Brokenn and HHM. I'll probably just call teh guy back and give him just that information. He's probably looking for a "deal" anyhow, as the price I gave him... which is the Appraised value... seemed to turn him off.

[skweakalee]

Follow up (to an old and dead thread):
what if there was a cosigner, who 1) wasn't in/interested in bankruptcy, 2) who may benefit from a short sale, 3) who you want to help... is there any procedure you have to go through with the court/trustee when short selling a surrendered property, with no equity (obv), that is being foreclosed?

[justbroke]

I don't believe that you can short-sell it to the "co-signer" (or co-obligor). The transaction still needs to be arm's length.

[tobee43]

jb...what ever happened...i'm assuming you didn't sell it. i know when we were first looking in florida for a place we thought we may be able to pick up a short sale...that was at the end of 2008....no way at that time the banks were willing to touch them...even tho you saw them advertised cover to cover on every single newspaper.

i still to this day only know ..actually, less than a handful of people who were successful with short selling their property. i'm sure since that time things have gotten better for you...i hope.

[skweakalee]

What I meant was: the debtor was interested in helping out a family member (who cosigned the loan) by short selling to avoid an increase in costs/deficiency. Because after all, that cosigner who isn't in bruptcy may end up eating the deficiency.

i.e. A & B both signed on the loan. A goes into bankruptcy, B doesn't. A & B want to sell to C to keep B from being stuck with a higher deficiency.

Wish I knew more about short sales I suppose.

[justbroke]

Okay, so you want to have A&B sell it, at arm's length, to C. First, please understand that short sales are very very difficult to actually complete through closing. For every 1 that is successful, there are probably 99 that are not (anecdotal).

From what I understand, Colorado is an anti-deficiency state. If the "mortgage" is actually a "deed of trust" and the foreclosure is through Trustee Sale, then there may not be any deficiency on a foreclosure. However, both A & B are going to be hurt by the foreclosure or even the short sale, credit wise.

I would just not pin my hopes on a short sale. You may want to consult a foreclosure attorney to find out the best method in Colorado given the circumstances. Having a co-debtor who is not also your spouse may not be that common, but there should be a strategy to deal.

[HHM]

Side Note, CO is not anti deficiency.

The idea of short selling to an insider is practically dead in the water. The first rule of short sales, the debtor (whether co-signer or not) is that there must be some sort of hardship, the stupidity of someone co-signing on a mortgage would not count. (sorry to be blunt). You can always try, but frankly, I wouldn't pin my hopes on such an option, the co-signer is totally screwed.

[skweakalee]

Thanks for the replies and insight, I really appreciate it.

[flower04]

Thought I'd add my 2 cents:
We had somone offer CASH on our home, which was about 15k underwater. They REALLY wanted out house. We were going to walk away from it and lived in it for about a year after filing. We needed to move closer to our employment-which was about 50 miles away-and were going to leave the property vacant anyway this past summer. We had no sign of foreclosure. Their realtor knew a very good SS negotiator and things moved, quickly. Everything was "approved," we just needed a document from our attorney stating that the bank has the right to release the property. Our attorney wouldn't do it. She said it would never pass with the bk judge and that it would have to go to the judge in order to be taken out of our 13. We would have to ammend our case, and blah blah blah. It was going to cost us about $10k in legal fees to make this happen. We really tried to do the right thing. We tried for a loan mod, we tried everything, but when you lose your job, there isn't much you can do.

I would let it go and don't look back. It is hard for me still since we still have not seen a foreclosure sale date or anything. The home sits. We pay insurance on it and minimal utilities. It really sucks. What sucks more for me is that it is prolonging our ability to purchase another home in the future. Not that I'm dying to buy anohter home, but it provides a lot of family stability to know that we don't have to move when our lease is up.