Distressed Property ~ Short Sales and Bank Owned Properties

Aloha,

Distressed property is a term to describe properties that are being sold in transactions involving debts and  lien holder approvals or have other extenuating circumstances beyond a traditional seller and buyer. There are links below for information specific to approaching Distress Properties from either the Buyer or Seller perspective.

Simply put, a Distressed Property as defined by the Hawaii Legislature is :

HRS Chapter 480E – Mortgage Rescue Fraud Prevention Act

The link address is: http://www.capitol.hawaii.gov/hrscurrent/Vol11_Ch0476-0490/HRS0480E/HRS_0480E-.htm

 Within that statute is the following,

“Distressed property” means any residential real property that:

(1)  Is in foreclosure or at risk of foreclosure because payment of any loan that is secured by the residential real property is more than sixty days delinquent;

(2)  Had a lien or encumbrance charged against it because of nonpayment of any taxes, lease assessments, association fees, or maintenance fees;

(3)  Is at risk of having a lien or encumbrance charged against it because the payments of any taxes, lease assessments, association fees, or maintenance fees are more than ninety days delinquent;

(4)  Secures a loan for which a notice of default has been given; or

(5)  Secures a loan that has been accelerated.

In a short sale, there are 3 primary parties, each of which need their side of the ledger satisfied. The Original borrower, the Future purchaser and the Bank (s) who are in a recovery mode and attempting to reach an agreement between the buyer and seller with a transaction that provides enough funds to the bank for an acceptable recovery of a portion of the original debt.

If you are interested in seeing the currently listed Active Distressed properties on the Island of Oahu in Hawaii here is a link for you. For the purposes of these searches, Bank Owned Properties (REO’s) are also included in these searches and are differentiated within the “Sale Conditions” information ( Lender Owned or Short Sale )

Oahu Wide Distressed Property Searches

If you are currently an owner with a higher debt than the sale of your property at current values would realize and an unforeseen hardship has created a situation where you need to consider selling your home, this link will give you some additional information and resources. Certain lien holders currently have programs in place for qualified borrowers which may make participants for relocation and/or incentive payments.

Owner Short Sale Resources