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FLProcessor
442 Posts |
 Posted - 05/18/2008 : 10:22:13 AM
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I have a family member that recently called me for advice. Funny these people don't call for a mortgage when they're down at 70% LTV, but when they're in trouble and overextended, suddenly we're close-knit. Anyway, here is the situation:
A First, for $260,000 and a second (HELOC) for $100,000. Property probably appraises right about that amount (maybe $350,000) it was about $500,000 a year ago, South Florida.
If they were to propose a short-sale, say for example, at $300,000, would the first lender kick-in some principal reduction? I ask because I can't imagine their HELOC will be willing to take 40 cents on the dollar, and I'd be shocked if, in this market, they'd get more than $300k in a firesale situation.
I apologize if this is a newbie sort of question. I stick with the origination side and I really don't know the first thing about shorting / loss-mitigation / etc :-). |
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rad
1404 Posts |
Posted - 05/18/2008 : 5:25:25 PM
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| You won't believe me when I tell you but the rule of thumb on 2nd Payoffs in CA, I'm repeatedly told, is $1,000. So based on your value, you have much more room to play with. |
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RGK2394
1245 Posts |
Posted - 05/18/2008 : 5:35:23 PM
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| No doubt. Why is it "family" are the best family when they're in trouble, but when they buy their house, or refi to 125% LTV 3x over, they don't call. It's when they're behind on their taxes 3 years, and getting FC letters from the city, or are 3 mos down asking what rate I can offer, etc. Family *****. |
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rad
1404 Posts |
Posted - 05/18/2008 : 5:38:26 PM
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quote:
Originally posted by RGK2394
No doubt. Why is it "family" are the best family when they're in trouble, but when they buy their house, or refi to 125% LTV 3x over, they don't call. It's when they're behind on their taxes 3 years, and getting FC letters from the city, or are 3 mos down asking what rate I can offer, etc. Family *****.
And how?! I'm tempted to add "friends" to that tribe! Working on one friend and one family member now and I swear, never, ever again. |
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FLProcessor
442 Posts |
Posted - 05/18/2008 : 7:11:50 PM
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RAD - Thank you for the reply, is this consistent with others experience? The HELOC happens to be with Wachovia.
On Family, I think it's true what they say about something being worth what people pay for it. The less I charge people, the more they abuse me. The more work I do for them, the less they appreciate it. It's such a shame, and I think it's one of the key reasons this industry wound up where it did. That is to say, when brokers enter this business to improve things, to make things better, to try and compete with accurate GFE's and honest rates (rather than teasers and underestimates), it seems they are the shortest lived of them all...
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