As a Mortgage Guy I receive Product Summaries, Client Guides, Matrix’s and Rate Sheets. These are generated by HUD and the Fed and passed through Fannie Mae and Freddie Mac. Sometimes these do not change in weeks, but occasionally several times a day. The last guideline I received that listed the “waiting time” which a borrower needs after a Chapter 7 Bankruptcy was a minimum of FOUR years while a Short Sale wait was a minimum of TWO years. In debt which would you want? I’m no Attorney but I understand there are two types of Bankruptcies which investors are likely to run into, Chapter 7 and Chapter 13 (at our MassRealEstate.net monthly meetings we have at least one Bankruptcy Attorney per year that’s available to speak with you). Chapter 7 has most of the debt a debtor has accumulated liquidated, quickly and the debtor is discharged from most debt. Chapter 13 has a debtor making payments to the Bankruptcy Trustee who will pay the debtors over a 3-5 year period. Incidentally, when confronted with any Bankruptcy you want the Docket # which can verify the action.
With either Bankruptcy, it has been my experience that it is usually an adversarial process, while with a Short Sale all parties must be in agreement. The Seller, The Lender and the Buyer. I feel there is much less chance of an Action or Reversal with a Short Sale and if you’ve followed the Courts, Foreclosure/Auction/REOs have lately been reversed, especially when complicated with an owners Bankruptcy Action.
To Summarize: Lenders are expected to increase their Short Sales (for disposition of Overleveraged, Delinquent properties) in 2011 by at least 25% because it’s better for all parties vs Foreclosures. As a Home Buyer, Investor or Wholesaler this should be the most desirable niche for you. Fortuitously Barton is teaching Tuesday February 22, 2011, 6:30 – 9:00 pm at the SpringHill Suites 43 Newbury Street (route 1 North), Peabody, MA and Saturday and Sunday, February 26 & 27, 2011 8:30 – 5:00 pm at the Holiday Inn, 1 Newbury Street (route 1 North), Peabody MA. She’ll be teaching you how to set up and run a complete Short Sale Business.
I look forward to your joining us to learn this timely, profitable business, Mike Hurney