Different Sub 2 - Chap 7 Bankruptcy twist - Posted by Gene Texas

Posted by Arthur on July 13, 2003 at 11:58:34:

Sounds like alot of work for something that might not come through, for a small amount of equity (remember, thats equity, not profit).

But i guess its all in proportion to the property price, but this property sounds expensive if he is paying $2k a month.

It might be worth chasing, but i wouldn’t throw too much time and energy at it, i would be hunting other deals.

Different Sub 2 - Chap 7 Bankruptcy twist - Posted by Gene Texas

Posted by Gene Texas on July 11, 2003 at 15:40:43:

Seller is almost discharged from Chapter 7 bankruptcy and his FHA mortgage was not included in filing. Seller is 2 1/2 payments behind ($5000)and lender won’t talk to him about a forebearance ageement b/c of b/r. Seller will sign “subject to” paperwork with a contingency clause allowing me to market house for a lease option. I have a call into the lender now to see what can be worked out in light of this being an FHA loan. This is only about a $17,000 equity deal on a 27 year old house in good condition. I might have to spend a thousand bucks on it. I probably can get $6000 to cover the arrearages so it’s kind of a skinny deal. My specific concerns/questions are:
Why won’t the lender talk with him if the mortgage is not included in the filing? What would happen if I got the lender to put the arrearages on the back of the loan, sold on a lease option amd right before the discharge the sellers attorney had him add the mortgage to the filing?
Or is this just so much risk and hassle, should I just go on to the next deal? The house is in a good upside area but he just received an escrow shortage notice which prevents any significant cash flow for the first year. I did check the archives which had numerous bankruptcy searches but could not find one where the mortgage was excluded from the bankruptcy filing.
Your comments are appreciated.
Gene Texas