Co-op short sale?

The board might not approve the sale since it will lower all the other values.

Co op force field on!!!!

Happy Fking new year!!!!!! Whooot.

Thatz it. That's the last dog shit I wanna step over. Every dog betta be DNA tested in nyc. U leave a pile, the police be coming 4 u. Clean up your dog shit or else

"How can a co-op be a short sale?"

When it's sold for less than what the owner owes on the mortgage.

In theory, a second mortgage or equity line could make the total mortgage owed high enough that the co-op would approve the sale. This scenario would be a way to have the sale go through at a price comparable to others in the building, thereby not lessening the value of the other units. The seller would still be "underwater" since he/she borrowed more than the original amount.

Realistically, given the market changes, this situation would be a little far fetched, unless the seller really overpaid for the apartment.

Yes, very far fetched that people overpaid during a bubble.

Hahjajahahahahahaaaaaaaaaaaaa. Far fetched indeed!!!!!!

Hahahjajajajjaaaaaaaaaaaaaaaa. I'm hoarse from laughing.

I've seen a couple of co-op short sales. It's usually a combination of buying at the peak, overpaying even beyond normal peak prices, putting down only the minimum required 20%, and using an interest-only mortgage if allowed by the co-op.

The apartment we bought was very nearly a short sale because the seller had stopped making mortgage and maintenance payments, which then started to compound.

What building ?

I am wondering what type of action a coop board might take against a coop unit owner who has a huge Lien on the way. Can they be evicted?

Back to your question. Hojo - it sets a comp for your apt.

crg5377: Since the OP has stated that the apt is on the market at a "fire sale price" your scenario seems unrealistic.

What recourse does the co op have -- if they refuse the short sale, they could end up being responsible for the maintenance until the bank chooses to foreclose. And the banks are taking their sweet time to foreclose.

Nothing personal, but "fire sale price" is about as subjective of a term as it gets - no? I guess that I was also answering a more overarching question (though not listed) of "why" a co-op would easily approve a short sale. Since that was not the focus of the original question, I apologize.

Apt23 - you are absolutely right that the co-op could be on the hook for the maintenance until the shareholder's situation is resolved (either sold or foreclosed), but that would not answer the question of what the co-op's recourse is. That would be their liability/risk, if they block the short sale to keep building comp's at a certain level. Sorry to get grammatical, but your response strayed a bit as well.

Aztec

The co-op would be cutting of their nose to spite their face if they refused a foreclosure sale to keep the building's comps at a certain level.

Letting the shareholder languish indefinitely in foreclosure would only keep them on the hook for the shareholder's maintenance indefinitely as well. And yes, technically the bank is responsible for paying the maintenance when the property is in foreclosure, but in reality the banks (particularly the big ones like Chase and Citibank) aren't doing this at all ... because they can. Simple as that.

And while eventually the co-op will likely recoup all that lost maintenance (or not, if the shareholder is forced into bankruptcy), in the meantime that maintenance shortfall must be made one way or the other. It's amazing how quickly a thousand bucks a month (or whatever the monthly maintenance is) burns through even the healthiest building's operating budget.

Smart stuff NYCMatt - in your opinion, do some co-ops exhibit this counter-intuitive behavior to portray an image of affluence?