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HOPES equity share

This topic contains 7 replies, has 0 voices, and was last updated by Avatar of unclejim unclejim 8 years, 7 months ago.

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  • #6756
    Avatar of unclejim
    unclejim
    Participant

    When proposing an equity share offer to the bank – what value is used?

    1) The Mortgage balance; the Fair Market Value or a MAV?

    2) Which one will have the greatest chance of actually reaching a satisfactory agreement between all involved?

    #33690
    Avatar of dave salcido
    dave salcido
    Member

    I would introduce the MAV because your equity share offer to the bank should be based on the fact that you have already established the trust with the MAV as your baseline. The MAV should be determined by reliable comps or appraisal. Remember, this is a business proposition and you are inviting the bank to join in according to your business plan.

    #33691
    Avatar of unclejim
    unclejim
    Participant

    Would it be smart [necessary] that the bank get all of the increase in value above the MAV until the original mortgage was covered and then the 50/50 sharing with the owner would kick in?

    #33692
    Avatar of dave salcido
    dave salcido
    Member

    I’m not too sure there would be enough value to the homeowner unless the monthly payment was insanely cheap. But all things are negotiable. Leave some wiggle room in your negotiations and it should work out.

    #33693
    Avatar of unclejim
    unclejim
    Participant

    Does the home owner; who is facing foreclosure, actually have any wiggle room?

    “Stay in your home; save face with your friends, family and neighbors; realize the value of your home once you have satisfied your original loan obligation. Then refinance and buy out the banks equity position.”

    Is this a rational argument?

    #33694
    Avatar of dave salcido
    dave salcido
    Member

    @unclejim wrote:

    Does the home owner; who is facing foreclosure, actually have any wiggle room?
    A- Yes, I believe so. This is a business proposition.

    “Stay in your home; save face with your friends, family and neighbors; realize the value of your home once you have satisfied your original loan obligation. Then refinance and buy out the banks equity position.”

    Is this a rational argument?

    A- Maybe. I try not to give away the farm when negotiations begin. I just think the hoomeowner can do better.

    #33695

    @unclejim wrote:

    Does the home owner; who is facing foreclosure, actually have any wiggle room?

    “Stay in your home; save face with your friends, family and neighbors; realize the value of your home once you have satisfied your original loan obligation. Then refinance and buy out the banks equity position.”

    Is this a rational argument?

    You also need to remember that the homeowner may not, and it is not necessary or required, be “in foreclosure”.

    Your offer may be made to homeowner who wants to sell and is willing to leave their financing in place but their payment may be too high to allow for prospective resident. This would be a perfect opportunity to make a HOPES proposal to the bank. The property may or may not be over-encumbered, although it typically would be.

    #33696
    Avatar of unclejim
    unclejim
    Participant

    @Scott_L._Moyes wrote:

    @unclejim wrote:
    Does the home owner; who is facing foreclosure, actually have any wiggle room?

    “Stay in your home; save face with your friends, family and neighbors; realize the value of your home once you have satisfied your original loan obligation. Then refinance and buy out the banks equity position.”

    Is this a rational argument?

    You also need to remember that the homeowner may not, and it is not necessary or required, be “in foreclosure”.

    Your offer may be made to homeowner who wants to sell and is willing to leave their financing in place but their payment may be too high to allow for prospective resident. This would be a perfect opportunity to make a HOPES proposal to the bank. The property may or may not be over-encumbered, although it typically would be.

    What would the motivation be for a bank to agree to an equity share just to make it easier for a non-distressed homeowner to sell his home?

    #33697

    @unclejim wrote:

    @Scott_L._Moyes wrote:
    @unclejim wrote:
    Does the home owner; who is facing foreclosure, actually have any wiggle room?

    “Stay in your home; save face with your friends, family and neighbors; realize the value of your home once you have satisfied your original loan obligation. Then refinance and buy out the banks equity position.”

    Is this a rational argument?

    You also need to remember that the homeowner may not, and it is not necessary or required, be “in foreclosure”.

    Your offer may be made to homeowner who wants to sell and is willing to leave their financing in place but their payment may be too high to allow for prospective resident. This would be a perfect opportunity to make a HOPES proposal to the bank. The property may or may not be over-encumbered, although it typically would be.

    What would the motivation be for a bank to agree to an equity share just to make it easier for a non-distressed homeowner to sell his home?

    Who said they weren’t “distressed”. Of course they are. The payments are more than are affordable and they are selling to get out. If they sell, they will have to do so as a short-sale since the value of the property is much less than what is owed. The bank and the seller will both lose.

    Virtually every mortgaged property in America is distressed right now.

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