My Hard Money loan is going to foreclosure - Posted by DSmith111

import · May 23, 2007, 12:45pm

Posted by Christen on May 24, 2007 at 19:09:35:

Ask them if you can sign a deed in leiu of foreclosure. Saves them the mess of a foreclosure and have them release you from any further legal action. I was surprised but if you see my post on the main news group I am working with a homeowner that is 4 months behind. The bank sent him a letter saying just sign the deed over and we’ll give you $1000 to walk away and no further action against you or the property will be taken.

import · May 23, 2007, 12:45pm

Posted by DSmith111 on May 23, 2007 at 12:45:50:

I won?t go into the messy details, but after hanging on for almost a year, a property I bought to resell (it hasn?t) is going to be foreclosed next month and I?m trying to figure out what to expect.

Long story short, I bought a house based on comparables that turned out to be fraudulent and far from accurate (I made a lot of mistakes). The hard money lender gave me an appraisal and loan based on a value of 155K. I currently owe 107K to the lender.

Anyway, like I said, it?s going to foreclosure next month. I have a few questions.

If they sell at auction for less than I owe, can they sue me for the remaining balance and legal fees?
If they can sue me, will I have a viable defense, given that they provided an appraisal of 155K and I only owe 107K?

I know there are tax implications, but I believe my loss will offset any tax I have to pay for relief of debt. Are there any other issues I need to consider?

Thanks for your help.

import · June 5, 2007, 2:20pm

Re: My Hard Money loan is going to foreclosure - Posted by Kalonji

Posted by Kalonji on June 05, 2007 at 14:20:11:

I would definitely contact the lender and ask them if they would agree to a short-sale. If you can provide the lender with the failed contracts (also, try to identify why each contract failed… it could be something else going on with your deal), the lender may be flexible to selling the property for less just to get it off of their books.

import · May 24, 2007, 9:16am

Re: My Hard Money loan is going to foreclosure - Posted by DSmith111

Posted by DSmith111 on May 24, 2007 at 09:16:55:

No offense, but the ?find a buyer? advice isn?t very helpful. Obviously I?m working to find a buyer. I?ve had 6 contracts fall through over the last 8 months and I?ve listed at less than what I owe, which is 70% of appraised value with no work to be done.

Now that it looks like there?s a good chance I?m going to foreclosure I was hoping someone would be able to answer the questions I posted.

import · May 23, 2007, 8:12pm

Re: My Hard Money loan is going to foreclosure - Posted by Gene

Posted by Gene on May 23, 2007 at 20:12:56:

I agree with DJ-nyc. Do whatever you can to find a buyer.

Also find out if the lender will take a shortsale. It might give you more options.

Your questions depend upon the state its in.

Gene

import · May 23, 2007, 2:55pm

Re: My Hard Money loan is going to foreclosure - Posted by DJ-nyc`

Posted by DJ-nyc` on May 23, 2007 at 14:55:07:

Roll up your sleeves and find a buyer!!!