Paul Kim discusses why he had to decline two short sales.
Today I want to talk to you about, I actually had to decline, not decline but rather made a decision to not proceed to do a short sale. In my last episode, I talked about FHA mortgage. So I had two homeowners that called me.
The first one, she bought this house, got into a bad situation and she had to move out. And she had to rent out the property. And once I got authorization to speak to the bank on her behalf, found out that it was an FHA mortgage. And so if you listened to my last episode, I talked about what the requirements are.
If the property has been rented out for more than 18 months, then automatically you can’t qualify. So, after I found out that it was an FHA mortgage, I called the homeowner and found out that the property has been rented out for more than 18 months. And so what we proceeded to do was to see whether we can purchase the property with the outstanding loan balance.
And so, went out to the property. Analyzed the property. The outstanding balanced on the property was approximately I believe was $230,000. But when we were out there we found out that, you know, as an investor I can’t purchase that property for $230,000. Just didn’t make sense financially. And so what I did was we sell it to a local agent that we know and found out that the property even if we sold it at $200,000 retail, can’t sell it for $200.000. It will be a waste of time for the gent to even consider putting it on the market to try to sell it. Because at the end of the day, it’ll still be, the property will still be under water. And so we decided that we can’t do anything. And you know, as much as we want to help, we can’t do anything in that situation.
The second situation was another FHA mortgage. I didn’t realize that it was FHA. So, but on all of my short sales that I do, it’s mandatory that I run a title search. So as soon as I found out that it is an FHA mortgage, I have to go look through the homeowner’s financial documents. And so I found out looking at the tax return, I see that the property has rental income, alright? So I see that, automatically it is a rental income. I see that the homeowner’s property address on her tax return as well as the homeowner’s bank statement is an address that is not the same as the property address. And so obviously, by deduction, I knew that the property has been rented out. I looked at the time frame, the tax return for 2016 and so we are now in 2018. So we’re looking at at least 12 months plus. And so what I did was I called the homeowner and found out that indeed the property has been rented out for more than 18 months. And so I decided I’m not going to pursue it. And respectfully decline and said you know I can’t help you and so we had to move on.
All right? I hope this session is good. The only way that I know that you like it is by subscribing to my YouTube channel. All right? Until next week. Bye now.