Click on the video link. This video focuses on IndyMac Bank, the FDIC, and OneWest Bank. Bankers and the FDIC will have more explaining to do: Short Sale Provides Big Profit for Bank
For those who don’t feel like taking notes, it is a study on the sweetheart deal they cut, complete with an example of a bad $478,000 loan with six months of missed payments purchased at 70% for $334,600. The borrower is forced into a short sale on property at $ 241,000, so the loss on the original loan is $244,200. The FDIC pays 80% of the loss calculated from the original price, not the reduced 70% reduced price, bringing the loss payment to the purchaser to it to $195,360. So the short sale proceeds plus the FDIC guarantee totals $436,360. Already the profit for the purchaser is $241,000+$195,360 – $334,600 = $101,760, and on top of this, the original borrower was forced to sign a promissory note for $75,000.
If you are the seller on one of these deals, make sure you are not being taken advantage of by the bank holding the loan. Also, a good thing to remember is that when you go to buy another home, the lender/underwriter can treat this short sale just like a foreclosure. Your credit scores can be impacted the same way as well. You will have to wait 3-5 years under current guidelines before you are able to purchase again.