Mortage sold that is in Foreclosure, does new debt service start process over?

[Wyldrush]

What is the name of your state? Fl

Here is something new for me. My friends home is in foreclosure. Has it listed for short sale since he is still several months away from a nice pot of money to save his home.
Current holding sent a letter stating on July 1 the mortage is being sold. Didnt know you can sell a delquient note in foreclosure. Makes me wondering why they would since both banks are not affliated.
Now will the new bank have to start the process over. Wait 3 months of no payments and then file for foreclosure giving him a good 8-10 months of time in which he knows he can fix this mess.

 

[dmiller12]

Makes me wondering why they would since both banks are not affliated.

The servicing of loans is sold in pools and sometimes the receiving lender will agree to take-on non performing loans in order to get at the servicing of the performing ones.

Now will the new bank have to start the process over. Wait 3 months of no payments and then file for foreclosure giving him a good 8-10 months of time in which he knows he can fix this mess.

They may have to send out a new notice of default but if they are receiving the loan already in default they'll do it right away. They won't have to wait.

The new lender will be the ones to decide whether a short sale will be approved or not.

 

[FlyingRon]

Sure you can sell off bad debts. The selling bank gets at least some money without the legal efforts of foreclosing and perhaps ending up owning the property. The buying bank gets a hefty discount.