Ron Artest short-sold his house in Sacramento too:
Jim Klinge
Klinge Realty Group
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From my own experience, short sales are a pain in the butt.
I am pending on my second short sale. Supposedly, I as a buyer am at a disadvantage, with the lender, the sellers, sellers’ agent, and even my own agent not aligned with my interests or having my welfare in mind. But I am OK with that. In the huge junk bin that is short sales, there are some good values, and the long waiting time for the banks means that I have time to fully understand the permit histories, earthquake hazards, neighborhood qualities, crime stats, etc., that I would not be able to in the rush of a regular sale.
What I don’t really understand is why a seller would choose a short sale process over a foreclosure. The credit hit is nearly the same. Most of the sellers are not going to have funds to buy another house in the near future, anyway. If the lenders had any recourse on the loans, I could see how a short sale which released the underwater sellers from their debt would be attractive, but in CA lenders do not seem to have the legal footing nor resources to pursue payment of bad debt. I can see a short sale as an advantage to the lender vs. a foreclosure, but I don’t get why an underwater seller would be interested.
I would consider Artest’s situation a strategic default, not a short sale. There is no hardship and a ding on his credit won’t affect his ability to purchase another house. He reneged on his contract so so is dishonorable, but he is being nice to the bank by cooperating with a short sale. There are plenty of foreclosing McMansions in Rocklin.
This is old news because Aurora Loan Services took it back at the end of March 2011. Zillow says it sold for $905k at the end of May 2011. That’s if I’m looking at the right house but since these were all custom built, I’m pretty sure it’s the right house.
Link to foreclosure:
http://sacramento.cbslocal.com/2011/04/05/kevin-martins-rocklin-home-repossessed/
Link to Zillow listing with 26 pics: http://www.zillow.com/homedetails/2582-Clubhouse-Dr-W-Rocklin-CA-95765/54460393_zpid/
Too bad, I always thought he was a nice kid so it surprised me a little that he’d do this.
P.S. Artest legally changed his name sometime in the last year or so to Metta World Peace. No lie. 1st name: Metta Last name: World Peace. 😆
Oh darn, I didn’t realize two links in my first post would send it into moderation. My apologies.
I’m still not quite getting what leverage a millionaire has over a bank to make them conform to this short sale. I know of another guy, well to do, owned another property, and still got to short sell a property he overpaid for five years earlier. His yearly income was a few hundred thousand a year, so he could easily afford the property. He just didn’t want to. I’m still flummoxed as to why banks would agree to a short sale with people who can easily afford to deal with their investment mistake, but simply don’t want to. What’s the point of a freaking contract if you can just null and void it later when things don’t go all your way??
Your well-to-do friend could choose to stop making payments and force the lender to foreclose so the bank may consider a short sale the better option for them. As far as “reneging” on a contract, if a contract stipulates payment obligations and non-payment penalties / remedies and your friend chooses to live with the latter, how is that “reneging”?
Booty, my friend DID stop paying, and orchestrated a short sale. He’s now out of there. He got a mortgage on the property for $830K, and the bank resold it for 610K.
The question is ( I didn’t ask him) how he can just decide to walk away from a contract even though he has other properties and money in the bank? He could have paid the thing off right away if he wanted to.
Can’t the bank say, “look, you violated this contract. either pay up, or we sue for the difference, because we know you have the money to pay…”
Sorry for the dumb questions…
In California you can walk scot-free as long as the bank approves the short-sale.
I thought that a seller could be denied a short sale if they showed that they had money. But if they approved 2 NBA players who make multi-millions per year, I guess they are approving everybody?
But then again, if you told me that Ron Artest made $5 million per year, and blew $5 million per year, it wouldn’t surprise me.
Can’t the bank say, “look, you violated this contract. either pay up, or we sue for the difference, because we know you have the money to pay…”
No, they can’t. The bank loaned the money and required the house and only the house as collateral, not any of his other assets nor can they “force” him to pay based on his income any more than they would “forgive” lack of payment if his income fell below a certain level.