Foreclosure question for Bronchick - Posted by Tom-Alabama

Posted by Ronald * Starr(in No CA) on September 04, 2003 at 21:34:25:

Brian L. Renfrow–(NY)-------------------

Sorry to hear about your disappointing real estate venture. Here we have a new saying “Something ventured, nothing gained.” Except possibly some experience.

I think that you do a valuable service posting this. It may serve as a warning to beginners to be careful about what they do.

Interestingly enough, yesterday and the day before we had posts from a leasee/optionee whose situation paralleled the one you were in. It was Donna, whose original post is at

I hope that you will recover you emotional enthusiasm for real estate investing and venture out again.

Good Investing New Time*************Ron Starr***********

Foreclosure question for Bronchick - Posted by Tom-Alabama

Posted by Tom-Alabama on September 03, 2003 at 19:20:47:

I just purchased a house subject 2, recorded the deed in trust,
etc. In the beginning the house seemed like a good

ARV $85 - $90,000, Loan Balance $55,000 piti $572.00

The catch was the owner is 3 payments behind and in
foreclosure. I did everything just as the get the deed type courses
teach including letter to the mortgagor stating I am property manager, etc.

I got a call today from the Mortgagor whom says the
foreclosure process has already begun and referred me
to the attorney whom said they do not have to accept
the 3 back payments that I have already mailed to them
(they are holding the check). They say they can call
the loan due because of the default and proceed with
the foreclosure.They do not know I own the house.

By the way the mortgagor’s are private individuals.

This question is likely state specific but I am going
to ask you anyway. Can a lender refuse back payments
and call a loan due the way I am describing? Is this

By the way, if they do call the loan due refusing back payments,I will likely
use a private lender and pay the darn thing off.

Thanks so much for any advice,


Not Bronchick, but… - Posted by B.L.Renfrow

Posted by B.L.Renfrow on September 03, 2003 at 22:23:41:

…if you only wanted to hear from him, you probably should have just e-mailed him directly.

I had a similar situation a couple years ago, where I’d taken a property subject to the existing financing, which was held by a private individual.

While the private lender was initially cooperative, he eventually figured out there was profit to be made, and he decided he – not me – should be the one to profit, whereupon he refused payments and called the loan due.

Bottom line is, the lender likely can refuse the payments and call the loan. But it depends upon your state laws and the terms of the existing note.

Best thing, as JT-IN says, is to have a local attorney review the documents and then decide how to proceed.

Brian (NY)

Re: Foreclosure question for Bronchick - Posted by JT-IN

Posted by JT-IN on September 03, 2003 at 22:06:51:


You should be asking a local lawyer, who is well versed in foreclosure law these questions. Alabama has some squirrely laws as to foreclosures, which appear to be pro-lender, and provide a very short time window to complete a foreclosure. The only saving grace is the 12 month redemption period… which is rather long.

You should read the mortgage contract, and if the Lender can refuse the defaulted payments, it should specify this action in the mtg. Chances are the Lender can refuse to accept anything but a payoff at this point, once the borrower has defaulted… (just my guess here).

Again, obtain a copy of the docs, and go see a local Atty this week or next…


Re: Not Bronchick, but… - Posted by js-Indianapolis

Posted by js-Indianapolis on September 03, 2003 at 23:46:25:

How’d that work out in the end? You make your profit?

Re: Not Bronchick, but… - Posted by B.L.Renfrow

Posted by B.L.Renfrow on September 04, 2003 at 11:42:40:

No. I didn’t have the resources to pay off the loan, and my T/Bers refused to get a loan, apparently thinking (correctly, as it turned out) that they could just quit paying, wait it out, and make a better deal with the lender than they had with me.

My attorney’s recommendation, which I initially resisted but ended up following, was to deed the property over to the lender in exchange for releases from everybody involved.

Brian (NY)