Foreclosure: 2nd is Foreclosing - Posted by Brian M. Powers(MI)

import · July 12, 2002, 11:10pm

Posted by Brian M. Powers(MI) on July 13, 2002 at 06:07:12:

it was a bad initial thought on my part. when i saw the 2nd was foreclosing my immediate thought was “short sale”. i’ve never done a short sale yet so it was a bad idea.
it takes a certain set of circumstances for the bank to agree to a short sale and this is definitely not one of them!
now go drink your coffee!!
BMP

import · July 12, 2002, 11:10pm

Posted by Brian M. Powers(MI) on July 12, 2002 at 23:10:38:

I am meeting a seller tomorrow. He has an $80K First and a $30K Second. FMV is roughly $200K. The second is foreclosing and auction is about a month away.
I would think that the 2nd would agree to taking a fairly steep discount.
Is it feasible to:

get a purchase agreement signed to buy the home from the seller for $130K(assuming for now the seller would take it)
then go to the 2nd and arrange a short sale for the 2nd to be paid off at a steep discount

Or is there a better strategy for this?
Thanks!
BMP

import · July 13, 2002, 11:33am

Re: Foreclosure: 2nd is Foreclosing - Posted by JT-IN

Posted by JT-IN on July 13, 2002 at 11:33:21:

BMP:

If you need any specific help on this deal, just let me know. I am available for the asking, as long as there is enough juice in any deal… and it sounds like if your numbers are right here, the juice is flowing.

I will gladly dawn my Hawiaian Shirt and put this puppy to bed…

Like a local Atty advertises here in Cincy… (and to put it in proper context, he is a Black Atty who is also a Minister)… so what Leslie Isahea Gainses says: “If yo needs me, yo calls me, K”

JT-IN

import · July 13, 2002, 8:42am

Re: Foreclosure: 2nd is Foreclosing - Posted by michaela

Posted by michaela on July 13, 2002 at 08:42:30:

hm, if those numbers are correct: 80k 1st, 30k 2nd, and there aren’t any other liens on it and the seller would accept 130k, fmv 200k (does it need anything to get it to that point, other than general sprucing up?)
even, if you don’t have any other way to finance it, it would be worth to even get a hard-money loan for.
65% would be 130k, and you might find someone to fund you for 70% - 140k, which would take care of the closing/points. you could then turn around and offer the house for 180k and put 40k into your pocket.

import · July 13, 2002, 7:47am

Re: Foreclosure: 2nd is Foreclosing - Posted by jeff

Posted by jeff on July 13, 2002 at 07:47:09:

it would appear to me that yuor best shot would be to buy-out the second before the foreclosure even if they would not discount. this would put you in the foreclosure seat. you are now foreclosing on the property and will atleast make your 30K back at auction if nothing else. you can now start bidding on the place by starting 30K above the other bidders that has to paid to get control of the place. once you win the auction, assuming you do, you can now continue making payments to the first and have 90K or so in equity. you wont have to get premission from the seller, just do it. he cant stop you regardless of his thoughts unless he pays you back the 30K. if you can get this discounted down to 25K or so, you stand to make 5K from the auction without even bidding.

import · July 13, 2002, 5:06am

Re: Foreclosure: 2nd is Foreclosing - Posted by Matt (MPD) IL

Posted by Matt (MPD) IL on July 13, 2002 at 05:06:10:

BMP,
I probably haven’t had enough coffee yet this morning but I’m trying to figure your math for why you think the second would discount AT ALL?

You say the FMV of the prop is around $200k. The first and second combine to only equal $110k. Where in there do you see that the second position has a chance at losing a dime at auction?

It sounds to me like you’ve got a deal with some equity in it but I don’t believe, without much further information that you could get either of the two lienholders to discount.

Is there greater than 90k in repairs, taxes, fees or anything that are eating up the difference?

Matt Yohnk
MPD Investments Inc.
myohnk@mpd-investments.com

import · July 13, 2002, 8:11pm

Re: Foreclosure: 2nd is Foreclosing - Posted by Stew(NE)

Posted by Stew(NE) on July 13, 2002 at 20:11:39:

I would like to clarify something. If the second forecloses isn’t it still subject to the first. In other words, as long as the owner is making payments to the first, How would the owner of the second get the “property”? In other words, if the second wins at the foreclosure what kind of deed do they get, if any. In my state, if the first forecloses and you are the winning bid you get a Trustees Deed. Also, If the there is a third and the second forecloses, wouldn’t he have to notify the third and give them a chance to buy out the 2nd before the foreclosure? Thaks in advance for your response.