foreclosure question - Posted by Richard

Posted by richard on March 13, 2000 at 08:56:20:

Thanks for your help.

List price about 117k. It sold last summer at 105k. It might sell at 110k today not much more unless I get creative. Two other houses on block are for sale. Houses sell better in the spring and summer. They put in a security system which I guess has a lien on the property. I will find out with a title search. Who knows what else. I finally got in touch with the sellers, they are getting divorced. She would like to save her credit and is willing to sign the house over but not sure about the husband. The note is in her name the mortgage is in both names. I think I got that right. She wants to preserve her credit and he already has bad credit.

The lender allows the homeowner sizty days to catch up on the late payments before they send it off to the attorney’s. ie: they did not make jan, feb or mar payments and it went to collection five days after the first. A letter was sent on the seventh from their attorney stating they were proceding with foreclosure.

I will talk to the mortgage company. The note was sold and it took a little tracking to get to the person handling the this. I have not talked to them yet, but I have the phone number and left a message. will call again today.

The utilities has been turned off (non payment). In colorado Springs, CO that is not a good thing to do in the winter. The property may be in worse shape then I thought. Will the lendor consider the potential property damage plus his expenses? Or does he care at this point?

again thanks for your help.

foreclosure question - Posted by Richard

Posted by Richard on March 10, 2000 at 19:55:05:

I sold a house seven months ago and took a 10k note. the 1st is three months back and going into foreclosure. They are two months back with me. I just started foreclosure on them. details: FMV 105K(maybe a little more), 84K first, 10K second(mine). should I contact the lender and buy the note at discount. If so how and how much? Will they talk to me? The sixty day redemption period is over and goes into foreclosure next week. I am trying to contact the current owners but they moved. I found out today it is listed with a realitor. So I have a call into them to get a phone number so I can contact them. Maybe just buy it back for the first. what should I do?

Re: foreclosure question - Posted by JPiper

Posted by JPiper on March 11, 2000 at 06:17:03:

Will the first mortgage lender discount? I doubt it…but it never hurts to try.

More importantly, is it worth it to discount if you can simply conduct your own foreclosure, take the property back subject to the existing financing?

Unless you have plenty of cash just laying around, or plenty of room to finance this property, why not take the easy route?

But first things first. You need to know the condition of the property. $20K in repairs will make this a lousy deal to pursue. Have someone walk through the property. I say “someone”, because I would not want the Realtor to become overly confused about whether he is due a commission.

You need to know the condition of the title. You might be able to do a deed in lieu of…but not until you know what other liens exist. They come with the property. You may have to foreclose to clear title.

All in all, discounting the first would be well down my list of things to do. The things that would be important to me would be condition of the property, condition of the title, and the total amount to bring the first current (including all fees), as well as the timing of when I had to do that. Further, you need an exit strategy…and because of that you need to calculate holding costs to implement that strategy.

Make a business decision…if the above numbers are not right, it’s possible that a foreclosure is not in your best interests. Put a pencil to it.

Keep in mind that you have a note that could be pursued without foreclosure, assuming your borrower is collectible.


Get Deed in Lieu, or wait for it to sell - Posted by Bob H

Posted by Bob H on March 10, 2000 at 20:38:49:

1st probably won’t discount - plenty of equity to protect their position. Find out list price - is it salable and reasonably priced? Will sale proceeds be sufficient to pay off all encumbrances? If so, your easiest solution is to just wait for it to sell, and get paid off at closing.

To gain more control, contact sellers and offer to accept a Deed in Lieu of the foreclosure. If they think there is any equity left for them, they may not be willing to do this. (Be sure and get a title search before accepting a Deed - if they have any judgments, they cloud the title)

I’m confused by your comment that the 60 day redemption period is over. The redemption period follows the f/c sale - not preceeds it. Maybe it’s different in your state, you need to confirm the foreclosure procedures in your area, as they will impact your potential options.

Re: foreclosure question - Posted by Richard

Posted by Richard on March 13, 2000 at 07:56:50:

Thanks, I will check into the condition of the property, do a title search and check into what it would take to get the first current and when.

I will continue to discuss with the first on a discount. I can always hope. I can cash out the first if it is worth it.
Thanks again.