I don’t want to put my credit on the line. He is making $20,000 less than he was when he purchased the home. Even if the bank agreed to a short sale I would have just flipped it anyway. I was trying to find another Investor that wanted to lease/option to him but with no luck. That’s why I was trying to find him a loan so that it would be in his name with his credit at risk. If I had the cash to do the deal then I would because it wouldn’t be the pressure of the monthly payments. See my dilemma? Thanks anyway.
I have a homeowner that called me and is in foreclosure. He owes about $199,000 and the market value is around $170,000. Is it possible for him to get a loan from anywhere and pay off the current lender via a discounted mortgage? He definitely would like to try to keep his home. He was laid off of work for about a year and has now found a job which he has been on for the last 4 months. Are there any other viable solutions for him that will allow him to keep his home that I haven’t thought about? I have been racking my brain trying to think of something. Any advice is very much appreciated!
Has he tried speaking to his current lender? I don’t think banks get any pleasure out of foreclosing, and if they did they are sure to be stuck with the property for a long time. Perhaps he could suggest an affordable increase in payments to pay off the backlog of payments.
If the bank refuses, remind them that $200k is owed, its worth $170k, it won’t sell on the court steps and its going to be on their books for a while unless they are willing to take a big hit on monies owed.
Arthur, he did try speaking to his bank prior to finding employment. However, they stated that they had to go ahead with the foreclosure since he did not have a job at the time. He hasn’t spoken with them again since securing employment. Also, the job that he has is making $20,000 less per year. Therefore, he cannot afford a payment plan or note modification to add the arrears to the note. He is still seeking employment that will get his income where it used to be but right now he just cannot afford any additional money added to the payment.
Now you see my dilemma. I cannot think of a way to keep him in the home. I’m sure the bank will discount the mortgage/short sale because as you stated they are not in the business of keeping the homes but if I was able to get him a short sale deal then he wouldn’t be able to keep his home. That’s why I wanted to know if there was somewhere that he could get a loan, with his credit situation, and be able to start over. Thanks.
This is just a thought. Why don’t you offer the bank a short sale and purchase the property from him. I have done this before and it works. You will need a significant discount. Submit a purchase agreeement and explain and back your reasoning for the short sale offer including, comparables, appraisal, and his inability to continue to make loan payments. If I were in your situation I would offer about $135K and see what happens. Most of the time they will counter. If you do get a deal say for $135K you could purchase the property and then rent or lease/option it back to him for a price above the $135 you purchased it for. Make sure he can make the payment otherwise you will have to evict him. You are saving him a foreclosure and giving him a place to live. If he does not end up buying it big deal. You made your money when you purchased it.