Need help with a short sale (approved, foreclosure, financial, loan)

[wriggleandjiggle]

I have a few questions on short sale.

I made an offer on a house 5 days ago in Washington state. My agent told me that everything is set up with WAMU so the process will be short. Seller signed it immediately and they were going to submit it right away but I heard that they still don't know who to submit it to because of the recent sale of WAMU to Chase.

I learned a few things after our offer was submitted.
1. The Foreclosure date is set to Oct 3rd. House has been on the market for 500K for a year and a few weeks ago they dropped the price to 390K. I'm curious why they didn't drop the price earlier (so close to the foreclosure date).

2. What happens when they finally receive our offer before 3rd (foreclosure date). Do they go ahead and foreclose on the house because they don't have enough time to deliberate on our offer? or do they postpone the foreclosure date?

3. The seller actually has two mortgages $350K from Chase and $75K from WAMU. (now Chase owns WAMU what does that mean do us?) Who's responsible to negotiate with both banks. Our seller is a builder with five houses being foreclosed in Oct. My guess is that he doesn't care at this point.

4. We offered $350 without knowing any of above information. Now do you think we have any shot at this house? And is there anything we as a buyer can do to make it go faster?

I really like the house but I can't really go higher much as I'm financially pretty stretched already. I'm doing 10% down and after closing cost and some work needs to be done on the house(the house is brand new but needs to finish up:vanities, faucets, light fixtures, box for skylight and landscaping etc) not much will be in my pocket.

Thanks for any advice and help in advance.

[bentlebee]

I stopped reading after # 3....since the first mortgage has to agree since that is the biggest mortgage amount, number 2 has to agree aswell but is a minor player....I guess they will foreclose....sorry...they are so stupid by not lowering the listing price or take action sooner.

[Modification Specialist]

Hey w/j

I don't have alot of experience with short sales, but understand how you described your situation. In the case of WAMU being sold - time is going to tell what to next. You should start checking into other lenders.

On the other hand I do have experience with loans. You mentioned work had to be done on the property. If the repairs are serious enough, when you have an appraisal done. Any repairs can be noted on the appraisal report - the bank can multiply by 2, the amount of the cost of the repairs and deduct from the value of the home. This is called "Cost to Cure".



My 2 cents...

[bentlebee]

Any news since tomorrow is Oct. 3rd.?

[brokerdave]

you dont have an executed contract unless the seller is going to come out of pocket to pay the difference of his 2nd mortgage. as of right now its a short sale. but it probably isnt approved. most people dont understand how short sales work and arent getting them approved first, they are just listing it at a short sale. because of this they have to sign it to execute it. they will probably foreclose or you could be at the auction buying it for 250-300 today...

couple weeks ago i was at an auction and a $1.2+ million condo sold for $260k absolute for a 2400 sq ft condo. Thats a steal. Attend auctions and get a steal.

wamu is who he submits it too. chase buying them is a mear formality.