Michael Gaddis of Michael Gaddis, J.D. Realty Group closed a short sale in Ramona, CA on November 21, 2014. The property was encumbered by two (2) loans, the first was a Fannie Mae serviced by Chase while the second was owned and serviced by Navy Federal Credit Union. The final purchase price for the property was $355,000.
The property was being used as a rental at the time of the short sale. Sellers desiring to short sell rental units need to take greater precautions when deciding to short sell due to the potential tax consequences, both debt forgiveness and capital gains, that could arise out of the short sale. In this instance the Navy Federal Credit Union loan was a large, recourse 2nd lien, so after obtaining tax advice from a tax professional and weighing his options the seller determined that the short sale was more advantageous than letting the house go to foreclosure.
This short sale took longer than a normal short sale because Fannie Mae valued the house higher than what it was really worth. The value dispute could not be made through Chase, it had to be done through Fannie Mae directly. The dispute took nearly 6 weeks before Fannie Mae and Michael Gaddis reached a mutually agreeable value.
During the process one buyer fell out forcing Michael Gaddis to locate a replacement buyer. Short sales are always stressful because listing agents must face numerous issues that simply are not issues with traditional, equity sales including, but not limited to, the length of time to obtain approvals, battling lien holders, 3rd party liens, value disputes, the fact sellers will not fix issues with the property, etc.
Chase is not a particularly difficult lender to deal with when processing short sales, that is, unless Fannie Mae is involved. Likewise, Navy Federal Credit Union is also fairly easy to work with, provided you know what they are looking for.
If you or someone that you know is thinking about short selling their home and they live in San Diego, Orange or Riverside Counties please remember that Michael Gaddis is the perfect real estate broker to handle the short sale. Michael Gaddis’ experience as an attorney, real estate broker and NMLS licensed mortgage broker provides him with the rare “trifecta” that makes him the perfect real estate representative. Michael Gaddis can be reached at 760-692-5950 or by email at Michael@MichaelGaddis.com.