Replies

*ping*

“A fellow freeper needs advice in this thread, any of you care to assist her? OR know of any freepers knowledgable about short sales following foreclosure?”

Chunga and Kartographer are very intelligent about these things and I think they will be happy to help.

I did just read about this change to the rules below.

Treasury Drops Short Sale Requirements

http://www.cnbc.com/id/40930787

BTW hsmonx3 I hope things work out for you and for all the Freeper’s who have had difficulty. Honestly it breaks my heart to hear people lump everyone into a mold calling them names bad things can happen to good people. A job loss, an illness there but for the Grace of God go I! I don’t think the Lord looks at people as dead beats he knows what is in their hearts and mind.

I'm not am not an expert in the single-family area but it seems to me that the poster's parents are best advised to bid for the property at auction. If they submit the highest bid at auction (the only competitive bid will likely be from the lender), they will own the home free and clear, assuming the mortgage is the only lien, and they can rent it to their children with no meaningful negative tax consequences. The home can then be willed to the children and pass to them pursuant to the settlement of the parents’ estate.

The principal question will be how aggressively the parents will have to bid in order to win the auction. If they are prepared to pay an amount equal to the unpaid principal balance plus delinquent interest they are likely to carry the day. But if this were the case they probably would have personally refinanced their children's defaulted loan and the foreclosure would never have occurred. In the more likely event that they are not willing to make the lender whole, the lender will purchase the loan at auction and proceed to market the REO property.

If the lender acquires the home at auction it will likely contact the parents to determine whether they wish to acquire the REO as they had expressed interest in it at auction. At that point some price agreeable to the parents could be determined. But the children will have been evicted by this point, so the issue is likely to be essentially moot. On balance, I suggest that the poster vacate his home and rent a new place. Presumably, his parents will be willing to extend him a loan to purchase a new, unencumbered home of equivalent value to his former home at some point in the future. Moving is a pain, but it is likely to cause less stress and acrimony than any other alternative discussed here.