Thanks for the advice, folks.
Our servicer is Countrywide and my understanding is they will not pre-approve a short saleâ€“â€“they will only review the short sale offer after it is actually submitted for approval. So, as long as they approve the short sale offer (with absolutely no fraud, of course), why should it matter what the real estate investor decides to do with the home, including renting it back and/or selling it back to the previous homeowner? Please let me know if there is currently any legislation prohibiting this.
What's in it for the investor is interest income of almost 10 percent per year ($2,000 rent x 12 months = $24,000, based on purchase price of $250,000), less any financing costs if the investor decides to obtain outside financing, less real estate taxes and insurance, numerous tax benefits, a premium over the purchase price, and best of all a hassle-free tenant and buyer . This beats any jumbo CD currently paying a paltry taxable 2 percent. There is a risk that the property value may continue to decline for the near term; however we can overcome that with a pre-agreed TBD purchase price. Ideally the investor will finance the sale back to the previous homeowner, thus eliminating any waiting period for the previous homeowner to qualify for a government loan due to the short sale, and the investor will continue to earn interest income on the loan . Of course, all terms are negotiable and we both should do our due diligence.
This is an opportunity for an experienced investor who appreciates creative dealmaking and thinking outside the box. You would think that lenders would simply allow homeowners to short refinance their home and remain in the home; however my understanding is that lenders are extremely reluctant to reduce principal on an existing loan. Yet, they are willing to reduce principal via a short sale if you are a NEW buyer. Brilliant, isn't it? By the way, the Hope for Homeowners program is a joke.
So, any investors out there willing to make a deal? Or any agents out there willing to facilitate this deal?