Situation: Borrower ("Tim") bought another primary residence before he sold the old one. When it became clear that the old one would not sell without a short sale, he elected to sell the new residence instead. Tim owed over $260K on one loan to Bank of American ("BOA") on the property to be short sold. He had never missed a payment to the bank or any of his other creditors, had a well paying job with disposable income and a decent amount of liquid assets. He had been told by another real estate agent that he would have to miss payments to the lender in order for them to agree to do a short sale. Luckily for Tim, he choose to work with us.
Negotiation Notes: BOA agreed to entertain Tim's short sale even though he was current on his loan payments as well as his other credit. However, due to his credit, disposable income and liquid assets, BOA initially requested a cash contribution from Tim in the amount of $25K. We negotiated the cash contribution down to $12.5K and confirmed that it was permissible for our buyer to pay the cash contribution. Had Tim followed the other Realtor's advice and stopped making payments when he had the exhibited ability to make them, his short sale could have been denied as a "strategic default".
Summary: Despite having good credit, disposable income and never missing a loan payment, BOA agreed to the short sale. BOA received net to them $89,227.70 from the sales price combined with the cash contribution paid by our buyer. This amount represented over a 65% discount on the mortgage balance. Finally, thanks to our short sale structure and negotiation skills, Tim received from BOA a FULL DEFICIENCY WAIVER, meaning the $170,841.98 balance of the mortgage not paid off be the sale was written off by BOA without any further liability to Tim. All that Tim needed to do was show up to the closing and sign the deed. Problem solved.
Short sale approval letter, negotiating notes, closing statement and borrower's last mortgage statement attached below.
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