Has anyone ever had to foreclose on a property??? - Posted by VickiNH

Posted by Ben (NJ) on May 30, 2000 at 15:36:51:

all you should be concerned about are liens SENIOR to your mortgage, junior liens won’t affect you, they will just be cut off by the foreclosure judgment. You would be surprised how many banks and mortgage holders do not escrow the tax payments and end up paying 18% interest to the holders of tax liens when they discover their existence years later.

Has anyone ever had to foreclose on a property??? - Posted by VickiNH

Posted by VickiNH on May 29, 2000 at 08:24:11:

I just want to say that this is the best resource I’ve ever found for REI.

I’m wondering if anyone on the list has ever had to foreclose on a property that you’ve held a note on? What was the average time frame that it took to get someone out? What kinds of legal fees did you incur.

I see lots of people talking about buying, but little about when they don’t pay…

Yes, it costs $5,000 and almost a year… - Posted by David

Posted by David on May 30, 2000 at 05:40:43:

it was not an experience that I would recommend, but there were little options. The borrower had sold the property on an unwritten, unrecorded, land contract to
some innocent, naive people. He got a down payment from them and was getting his monthly payments on time but was just pocketing the money. He lied under oath and milked the situation for as long as he could. Here foreclosures are only held once every three months. He appealed the foreclosure, then didn’t show up for the court hearing. He stiffed his attorney(s), he had three different attorneys, another delaying tactic. It was a mess, avoid if you can.

Re: Has anyone ever had to foreclose on a property??? - Posted by SCook85

Posted by SCook85 on May 29, 2000 at 20:33:18:

The cost of foreclosure seems to be cheaper throughout the country. I have talked with numerous attorneys (I haven’t had to do one yet) they all say about $5k just the cost of foreclosing here in Baltimore. Where we get hit the hardest is the advertising. We must run ads in at least 2 publications for 3 weeks. The ads have to be rather large. I’m told that this can run $3000 alone. I have taken two properties back to date, but both were done with the payor signing the property back to me.

Hope this helps.

Steve Cook

John Behle’s new article… - Posted by Ben (NJ)

Posted by Ben (NJ) on May 29, 2000 at 13:02:58:

I was just reading John’s new article dealing with alternatives to foreclosure. This maybe worth looking at before you go any further.

I had to foreclose on a property - Posted by Bud Branstetter

Posted by Bud Branstetter on May 29, 2000 at 12:22:52:

In Texas, foreclosure is a non-judicial procedure(unless it is a home equity loan). This means that all you have to do is send a 20 day demand for monies due. You then accelerate the loan and file the notices at the courthouse at least 21 days before the first Tuesday of a month. The trustee then holds the sale and if nobody buys gives you a trustee’s deed. Here the trustee can be anything from $400 to $2000 depending on the attorney. You do not even have to be attorney to be a trustee here. I have even done a foreclosure for as low $79. I typed all the documents and the only costs was recording plus hiring someone to read it at the courthouse. But then I have had a foreclosure where the occupant got a restraining order against the trustee. After getting it foreclosed I had to evict and finally the sherriff had to knock down the front door to get the guy out. All that took 6 months when it could have taken two. The longer it takes in your state to foreclosure the more money you may have at risk.

Re: Has anyone ever had to foreclose on a property??? - Posted by JPiper

Posted by JPiper on May 29, 2000 at 11:33:26:

How long it takes is going to be a function of your state law, whether there are redemption rights, and the actions of the borrower (whether they file a bankruptcy, etc). You need to check with an attorney in your state to find this out.

Cost is going to be a function of how the foreclosure is conducted…again, this varies by state. I did one on a first a couple of years ago for $1K…which I thought was very cheap. However, I’ve also paid $2K. If a foreclosure in your state requires a lawsuit, then it may well be more.

The highest cost will probably be your carrying costs and perhaps the repair cost when you get the property back. I used to figure if I were foreclosing on a second that I would have to feed the first for 6 months. That may not be long enough depending on your state foreclosure laws. Also figure the carry cost while you’re repairing the property.

Foreclosure properties are well known for being trashed and perhaps stripped. Having a feel for this number is quite important obviously, and can drive whether it is going to make sense to foreclose at all.

All in all, if you can get a deed in lieu of foreclosure it will probably make sense to do so. However, note that sometimes the borrower has other liens attached to the property. If that’s the case you’ll have to foreclose to clear those liens.

JPiper

Re: Has anyone ever had to foreclose on a property??? - Posted by phil fernandez

Posted by phil fernandez on May 29, 2000 at 09:12:00:

Vickie,

Only once have I had to take back a property that I financed. It was a mobile home in a park. Rather than spending the money and time to foreclose, I took the mobile back in lieu of foreclosure. Sometimes you might have to bribe with money, but even that would be quicker and cheaper than the foreclosure process.

Where in NH are you. I’m in Vt and have a vacation place in N.H. ?

There’s a couple that address this. - Posted by John Behle

Posted by John Behle on May 29, 2000 at 17:07:32:

There are a couple articles that talk about foreclosure and people not paying you.

The one Ben might have been referring to can be found at: www.papergame.com/article008.htm and is titled “Throw the Old Couple Out”.

Another is at: www.papergame.com/article016.htm and is titled “Forget Foreclosure”.

Re: Has anyone ever had to foreclose on a property??? - Posted by Scott SC

Posted by Scott SC on May 30, 2000 at 12:59:42:

Piper,
In regards to your last paragragh above, is there anyway to prevent the borrower from creating other liens on the property?

Re: Has anyone ever had to foreclose on a property??? - Posted by JPiper

Posted by JPiper on May 30, 2000 at 17:01:33:

As Ben mentioned below, you can escrow taxes…that will prevent a property tax lien.

But in terms of preventing liens subsequent to your mortgage or deed of trust…no, you can’t prevent. And therefore, if they exist you would probably want to foreclose rather than accept a deed in lieu of, unless they were very small, or unless you could negotiate a small payment for their release.

JPiper