Saturday, February 12, 2011
Short sale mystery
I was involved in a strange short sale experience this week. A short sale condo that had been listed for about nine months without an offer suddenly got two interested buyers. The listing agent was informed by both buyer's agents that an offer was forthcoming. While preparing the offer, one of the buyer's agents found that the owner of the unit listed in the tax record was different than the owner listed in the MLS. In fact, the owner listed in the tax record was the condo association. The listing agent, when informed of this, expressed shock having no idea of a change in ownership. A hasty call to the sellers of the unit revealed that they were also unaware of any changes. They are over a year behind on condo fees and mortgage payments.
An examination of court records revealed that the condo association's attorney had filed and received a court-issued certificate of title naming the association as owner of record on November 18. The lender holding the note was not named or copied on any of the court filings. After finding out this info the listing agent called the condo association to find out what their intentions were with the unit and how to proceed with a sale. They were unaware that they were now listed as owners of the unit and called the association attorney for clarification. The attorney, who billed the association for six hours at $200 per hour, could not find the file. As of right now, the association is listed as the "owner" of a unit that is collateral for a mortgage of about $50,000 more than the unit would bring on the market. The lender does not yet know that their collateral is no longer in the borrowers' names. The two prospective buyers don't know to whom to present their offers. The association named as owner doesn't know who the first lien holder is or how they are going to negotiate a settlement or even whether a sale is worth the trouble. As owners of the unit I assume that they are now responsible for the monthly condo fees. The previous owners have withdrawn the unit from the MLS. It is not actively for sale at the moment.
I have no idea how this will play out but I will be certain to keep an eye on it and report the outcome here. I don't expect a speedy resolution.
"Confusion now hath made his masterpiece."__William Shakespeare