Los Angeles

[renter4life]

I see a lot of short sale homes on the market. How long does a short sale listing last before the property goes into foreclosure and turns up as bank owned?

Message Edited by iNDO on 03-08-2009 01:36 PM

[JeremyMiles]

I don't think there's any rule.  I think that it can be a short sale even if they are up to date with the mortgage (anyone confirm or refute?), so it might be never.

[Geotpf]

Also, a lot of the banks (and Fannie Mae and Freddie Mac) have official or unofficial foreclosure moratoriums right now.  They don't want to flood the market with even more homes (as well as taking the hit to their balance sheets).

Plus, even when a home is foreclosed upon and the bank takes possession, they don't always put it on the market immediately (it might need repairs, plus there's the whole flooding the market thing again). 

That is, if you are looking at a particular house currently listed as a short sale, but want to wait until it gets forecloused upon, you may have a very long wait indeed.

[Rainyday]

I've been watching one for about 6 months.  Still a short sale, still at the same price.

[562chris]

I was wondering the same thing. According to pre4closurenetwork, a property I was looking at was listed as being in default by about $14K. Since the original mortgage was ~$300K, fourteen thousand dollars behind is something like 6 months of missed mortgage payments...Crazy.
 
Anyway, as of right now it's a short sale listed at about 1/2 the original price paid a few years ago, which still is a bit high and probably keeping most of the vultures away.   So I'm trying to gage when this property might go into foreclosure. Once you start defaulting, how long before the bank takes the property back?  (It was probably a vacation/investment property so I don't think they actually need to kick anyone out, it's empty now)

[JeremyMiles]

I watched a couple, and it seemed to take a couple of months between foreclosure (when it stopped being for sale) and reappeared on the market.  I guess it depends on the bank. 

[emiller]

I'm not any kind of financial or real estate wizard, I'm just an off-again on-again homeowner that does a lot of research, but in my opinion the entire short sale market is weird, bizarre, and impossible for the ordinary person to understand. Bank owned property (REO) is weird enough, but short sale is just unbelievable.

As far as I know, and there are more details to it, the way it works is like this:

Me: Hello lender, I've lost my job and can't my payments (maybe because a variable rate loan has reset) and because of the market I can't sell the place for whats owed. What can we do? I've heard about something called shortsale, how does that work?

Lender: Forget it, pay up or we foreclose.

Me: Hmmm....thinking to myself.....I talked to a real estate agent that told me that if I listed the property for what some crazy low number, and filled out a whole bunch of paper with the bank about how troubled I am, that if I get an offer for the short sale amount, the bank would take a bath on the loan and let me off the hook.....I'll try it.

Me, after a few missed or short payments: Hello again lender, I've got great news! I listed my property with an agent as a short sale and I've got an offer for a lot less than I owe, so what do you think?

Lender: Hmm....you say you've got an offer, eh? OK, so keep collecting offers and send them on to us, and maybe if we ever get to numbers we need to see we'll let you off the hook. But don't get too hopefull, we are still planning on foreclosing on you if we can ever get around to it. We are sort of busy right now dividing up the Bank Bailout money into our bonuses.

And you, the buyer: Dayum, the seller accepted my totally unreasonable offer, and says it's just a matter of getting the bank to agree to suck up the loss? Wonder how long that's going to take?

[wordupmag]

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Lender: Hmm....you say you've got an offer, eh? OK, so keep collecting offers and send them on to us, and maybe if we ever get to numbers we need to see we'll let you off the hook. But don't get too hopefull, we are still planning on foreclosing on you if we can ever get around to it. We are sort of busy right now dividing up the Bank Bailout money into our bonuses.

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hahaha lol

Message Edited by wordupmag on 03-19-2009 01:11 AM