Get expert service & care through San Diego Short Sale Attorney and Broker specializing in Carlsbad, Oceanside, San Diego, and Chula Vista, CA.




Michael Gaddis of Dream House Realty, Inc. recently closed a short sale Carlsbad, CA. This short sale was, by far, the most difficult and complex short sale ever negotiated by Michael Gaddis. The first lien holder was Bank of America and the 2nd lien holder was PNC. The short sale began on September 02, 2010. From the beginning the short sale was plagued with issues. At first the main issue surrounded a dispute between the owner of the property and the person occupying the property. It took nearly 6 months to get this problem addressed. From there, a buyer was procured and full approvals were obtained from both the 1st and 2nd lien holders for a purchase price of $750,000. One week before escrow was set to close Lawyers Title ran an updated preliminary title report and discovered that 2 creditor judgment liens and an HOA lien had been placed on the property. Michael Gaddis approached the lien holders in order to try and work a deal out with them that would allow the sale to move forward. Both lien holders refused. At this point Michael Gaddis advised the Seller to file for bankruptcy which would effectively wipe out the Seller’s personal obligation on the debts. However, although the Seller’s personal liability on the debts was extinguished the liens were not stripped. After the bankruptcy the Seller expressed her desire to continue with the short sale. Meanwhile the Buyer advised Michael Gaddis that while he was still interested in the property he was no longer willing to pay $750,000. The Buyer thought the property was worth $700,000 and not a penny more. Even though Michael Gaddis thought that $700,000 for this property was a bit aggressive, he agreed to try and negotiate the terms that the Buyer dictated. Much to Michael Gaddis’ surprise, both the first and second lien holders quickly approved the sale for $700,000. Michael Gaddis was then left with the daunting task of dealing the judgment lien holders.


The first thing that Michael Gaddis had to decide was between reopening the bankruptcy and stripping the liens off or re-approaching the lien holders and negotiating the release of the liens. Michael Gaddis chose to re-approach the lien holders and found that 1 of the 2 lien holders was much more receptive to settling than they were prior to the bankruptcy. He quickly arranged a settlement with this lien holder. Likewise, the HOA was quick to arrange a settlement. That left just one judgment lien. Ironically, the creditor in question was FIA Credit Services, a wholely owned subsidiary of Bank of America. It was this creditor that caused the most problems for Michael Gaddis. At first, Michael Gaddis approached FIA Credit Services directly to which he found stiff, and unreasonable, resistance. At this point Michael Gaddis decided to utilize his numerous contacts within Bank of America to help him try and get this matter resolved. Michael Gaddis quickly found several members of Bank of America’s senior management that were willing to try and assist Michael Gaddis. Amusingly (in a nonsensical way), even Bank of America’s senior management had difficulty dealing with FIA Credit Services. Months and months passed by but eventually, Bank of America’s management was able to coordinate a settlement which would allow the short sale to close.


The challenges involved in this short sale were numerous and frustrating. Without a doubt, Michael Gaddis’ background as an attorney assisted him greatly in getting this short sale done. During the over two years it took to close this transaction, Michael Gaddis faced over 7 Trustee Sale Dates, 2 judgment liens, a bankruptcy, a motion to lift the automatic stay, expiring loan docs, a very upset HOA as well as conflicts between the Buyer and Seller.


In the end, everyone is happy, even FIA Credit Services. The Buyer purchased a home for $700,000 that, as of the day of closing, is valued on as $810,000 and on Zillow as $900,000. The moral of this story is that if you are going to short sell your house find a Realtor with the experience and knowledge necessary to handle any situation that might arise. You need to find someone like Michael Gaddis, or better yet, just pick up the phone and call Michael Gaddis. You will be doing yourself a favor. There are NO additional fees charged by Michael Gaddis. You can utilize the services of Michael Gaddis just as you would any other Realtor.



July 23rd, 2017

Posted In: Uncategorized

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