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TerryH
Rank 1
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Topic: Short Sale - Owner is Deceased...Help Please
Started: 5/09/08 Current Grade: A-
Posts: 4 Topic Type:
Not sure how to deal with this....I have minimal info right now from daugher in law.....her mother in law passed away and her and her husband are thinking of just abandoning a 700000 lien to a lakefront property -they see no reason not to do so- not sure where the value is right now but a good amount less....they are very angry with mother and not sure they have incentive to go through a short sale - husband has taken a short sale 'course' and met with a realtor and attorney but they are telling him that they will need to provide in depth financial information.....is this true for someone deceased...

1-how would you motivate them - ? She has put them in debt - no life insurance although she said she had it, and did not take offers on this property when she could have.....i know they are not supposed to profit or is it just the owner who should not profit from a short sale.....are the heirs the same???

2-how does the lender view a short sale for someone deceased - what needs to be proved - they will not want to do much if they do move ahead - is death certificate sufficient???

THANK YOU!
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MVIHoldings
Rank 3
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# 1
Default
Posted: 05-10-2008   Current Grade: B
Do they have Power of Attorney? If not, the bank might not be too cooperative. However, keep talking to them, get them past their anger (it changes nothing in their favor), and persuade them how trying for the short could lessen their burden.

Good luck from Phillipsburg!
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stevebuyshouses
Rank 4
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# 2
Default Title
Posted: 05-11-2008   Current Grade: ?
One question is in the state this is in, can you get title so that some can transfer in the event of an agreement with the mortgage company prior to a potential foreclosure.

One problem in some state is dealing with the estate while the mortgage companies time clock is ticking away. Add to that part, the potential of waring sides in the family and it gets difficult.
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JohnCorey
Rank 5Ambassador
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# 3
Post Estate?
Posted: 05-11-2008   Current Grade: B+
There is more to this than just the short sale or debt aspect.

Was there a will, is the property owned by a trust, is there an executor, will probate be necessary?

Technically the couple do not own the property if the lady had it in her name and she recently died. Broadly speaking I would expect the estate owns the property. There is a well defined process for moving the title to the heirs. The same process can be used to facilitate communication with the lender even if there is no Power Of Attorney (POA).

Legal advice that is specific to the situation and the state is needed to clarify just what you have on your hands.

If the lender is facing taking the property back they might be very open to a short sale or they might want to just foreclose.

As the lady has died the short sale process might be easier as the hardship conversation can be simpler. The lender really has no one to go after other than the estate if the debt exceeds what they are likely to get from sale of the property. The lender cannot come after the heirs directly.

John Corey
www.CheleseaPrivateEquity.com/blog
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JohnBoy
Rank 4Ambassador
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# 4
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Posted: 05-12-2008   Current Grade: A-
My biggest fear would be whether all the legal t's and i's are crossed and dotted before doing anything. You might have to end up waiting quite a long time for the probate process to finish and you'll have to be sure the bank will wait too. You don't want to spend all your time on this deal to find out that it sold at auction and you never knew about it. Get as much info as you can and then go from there.
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