The short answer is yes! So long as there is a strong equity, a reputable escrow and title insurance, private lenders will fund short sales and foreclosures.
A short sale requires banks to take less dollars than owed on the loan. The owner must first be willing to cooperate. The short sale will cause a borrower’s credit to be seriously tainted. It will make it difficult to obtain a car, auto, credit card, or home loan. At the very least, it will put the borrower in the pool of riskier borrowers, requiring higher rates.
Then, the bank must also be willing to accept the offer. This will entail taking a loss but liquidating a “non-performing” asset from their books. Often, bottom feeders see “short sales” as great opportunities to buy homes below market. Banks do not want non-performing loans on their books, and therefore are willing to sell at a discount; yet, they do not want to sell too low. This delicate balance is challenging, as banks are not typically in the real estate sales arena.
Ultimately, a contract is agreed to, and an escrow is opened. A crucial piece of paperwork is the bank’s short sale agreement letter(s). It/they will state a bottom-line net for the bank and a time limit. Typically, the banks want their money quickly. Often borrowers will deploy cash, but in the event that they are not liquid, they will call hard money brokers, like us. This can happen, since banks tend to be slow in their responses when receiving short sale offers. For some banks it is weeks, some, months!
Hard money financing for foreclosures has the same criteria – they must have an escrow and title insurance, and, of course, equity! If there is an equity, escrow, and title insurance, the answer is yes. If the property is being sold at the courthouse steps for cash, then the answer is no. There is no escrow period nor title research nor insurance for a cash sale.
If you see a short sale or foreclosure and need financing, call us! We say YES to short sales and foreclosures! Cushner Capital Group (760) 845-9035
