Posted by Bud Branstetter on March 26, 2001 at 22:20:27:
1 through 5 should be Pactrust. The seller can help make payments. The buyer will be willing to put down more and make a higher payment because they own it. If you make it for 4 or 5 years before they have to refi or have it sold then time will make it possible.
Help for the Overencumbered? - Posted by SueC
Posted by SueC on March 26, 2001 at 09:39:56:
I am running into many potential sellers who are mortgaged up to and above the FMV of their property, and need to get out. (As all of you have no doubt, I’ve heard some real horror stories - banks lending on extremely pumped up appraisals…why?)
Since we will probably be seeing many many more of these in the months and years to come, I am wondering if there are strategies to get these props under control at a reasonable price. I ran across one recently where the mortgage is about 30% higher than the FMV - just refinanced last year! There is a potential buyer too, who doesn’t know how to work with the bank - but maybe no one can, the bank refused a deed in lieu…but if I can get a workout wiht the bank, I may be able to unload it quickly.
For now, though, this post is meant just as a brain twister, wondering if there are possibilities besides RUNNING from these deals? Here’s what I’ve got so far:
Buy the mortgage at a discount from the lender, if they’re willing.
Seller kicks back some $$ into the deal to buy down the mortgage.
Find a “bigger fool” 
- just kidding
L/O if monthly payments are reasonable , to do a sandwich L/O just for cash flow if it’s there (no guarantee of profit in a sale) - similarly, structure a “wrap” to encompass the old payments with new, slightly higher payments. (This still doesn’t help with the resale value.)
Walk.
Any other ideas? Obviously, these are not very desireable deals, but in my desire to help people, the more creative ideas I have at my disposal, the better. In some cases, they might work.