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Will a bank accept a mortgage payoff offer on a loan (in foreclosure) that is less than what is owed?

Las Vegas, NV |

Balance on 1st approx 200,000. Home is in foreclosure with a sale date scheduled in less than 30 days. Parents have offered to buy 1st but only have 160,000 available to offer bank - funds can be verified and paid to bank in 3-5 days after bank's acceptance of offer. Will my bank go for such an offer? If not, the house will be foreclosed on. How common is this type of offer to a lender in this current real estate market - January, 2010?

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Attorney answers 1


This is generally called a short sale. In your state many banks are accepting these offers even if they are relatively low becausse of the crisis in housing. There is no legal answer to this question. It is up to the Bank to accept or reject the offer.

Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship. The opinions expressed herein are those of the author only and the fact that he has worked as an Assistant District Attorney; State Supreme Court Clerk; Special Assistant United States Attorney (Hawaii); Assistant Cornell University Counsel or Judge Advocate, United States Marine Corps should not be relied upon to assume that these statements reflect the policy of these organizations.