Posted by JoeKaiser on December 09, 2000 at 24:37:17:
Barbara,
What you’re not considering is that you won’t be able to get marketable title until the loan is satisfied. So . . . without title, you can’t get the loan to send them the money in the first place.
Joe
Closing on property being foreclosed. - Posted by Barbara_NY
Posted by Barbara_NY on December 08, 2000 at 07:49:07:
I’ve been involved in quite a few situations during the last year where I’ve attempted to negotiate a short sale with a lender in the later stages of foreclosure. The owners really want to get out and the property is worth less than the amount owed. I am aware that the lender’s best interest at this stage is to buy back the property at the auction to either establish a deficiency or to insure they get the amount guaranteed by PMI, HUD, etc. Also, please note that in these instances when the short sale isn’t going over well, I’ve suggested assuming the mortgage, buying the lender’s position, and other creative possibilities. The end result is some form of no. However, I’d like to know if anyone has successfully…
… closed on the property anytime short of the auction subject to the first.
For example: Let’s say the lender is owed $150,000, the home is worth $110,000 and you closed for $110,000 - $125,000. At the closing a check is cut to the lender for the full amount of the purchase price. The check is sent to the lender. What has been your experience as to what happens next…?
a. is your sale voided?
b. if the sale isn’t void, and other than the mtg. not being satisfied, any other title issues to overcome?
Please let me know what your experience has been, and thanks.
Re: Closing on property being foreclosed. - Posted by Skipp Tracey
Posted by Skipp Tracey on December 10, 2000 at 20:05:12:
Going even further than Mr. Kaiser: suppose you HAVE the cash and go to escrow with the money, hoping to close. The seller deeds the property to you, and the title company will send it to recordation for you. At the same time it will send the lender your check on behalf of the seller. Are you hoping that the lender will accept the check as payment in full of the outstanding loan via a short sale? Has the lender agreed to this, or are you trying to ram a check down the lender’s throat, so to speak? The bad news is that if the lender were owed 150K and you sent them a check for 125K hoping for a short sale, AND if the foreclosure were under way, the lender could have the sale on the courthouse steps and begin the sale with an opening bid of $25,000 (the “short” amount).
And that wouldn’t be pretty…
The above is an EXTREME example. Usually they would
refuse to accept and return the check… BUT… THEY DONT HAVE TO…
IMHO don’t mess around with mortgage companies in these situations where they hold the cards and where the law is on their side. Instead, don’t be afraid to jerk them around where you can take advantage of the (sometimes incredibly stupid) confusion that reigns in large organizations where, even with computers, sometimes the left hand doesn’t know what the right hand is doing.
Ah, but that’s the stuff seminars are made of…
Re: Closing on property being foreclosed. - Posted by JoeKaiser
Posted by JoeKaiser on December 09, 2000 at 24:43:38:
Barbara,
What you’re not considering is that you won’t be able to get marketable title until the loan is satisfied. So . . . without title, you can’t get the loan to send them the money in the first place.
Joe