Tuesday, February 15, 2005

House 6 - Part 2

Finally spoke with the listing agent a couple of hours ago. She did receive my offer and submitted it yesterday. The offer technically expired 1 hour ago, but I spoke with her and we're going to treat it as still live until we get a response. The issue is that Ocwen, a big finance company, is involved. They own the second on this house and the holder of the first is set to foreclose in 10 days. According to the agent, no one has offered enough to be able to pay off both loans, so she is currently in the process of trying to get Ocwen to accept a short sale. Since Ocwen is a large company, it takes a while for them to give a response. A short sale is really in their best interest since otherwise Ocwen would have to buy the house at auction to protect their position. Unfortunately, the Phoenix market is pretty hot right now, so Ocwen may decide to take their chances with an auction.

I'm not sure why they wouldn't accept my offer. Based on my research, my offer is $3,000 OVER the original first and second mortgages combined. Now, the loans are only 1 year or so old, so barely any of the principle will have been paid down, and there will be all kinds of late fees on the first (since that was the delinquent one), and of course, the commission for the listing agent needs to be paid. What all that means is Ocwen would probably end up losing a couple thousand or so on the deal. But I have to believe that they would lose more if it went to auction and they had to buy it, then resell it again. But, as I said, they may opt to take their chances.

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