Over Financed Houses - Posted by Sammy

Posted by soapymac on June 09, 2000 at 11:29:04:

you may want to check your comps with www.domania.com to see if the figures you got from octitle are comparable.


Roy MacLean

Over Financed Houses - Posted by Sammy

Posted by Sammy on June 08, 2000 at 19:53:46:

I have many chances to take houses subject to but the only problem is that they are all maxed out in the LTV category.

The latest call: Husband took pay cut gets less money Yada Yada Yada. I ask about the loans on the property and they say 1st is $96,000.00 and 2nd is $ 35,000.00 a total of $130,000 in loans!

House comps at approx $109,000.00

Any suggestions on how I can make this work?


Re: Over Financed Houses - Posted by dew

Posted by dew on June 09, 2000 at 20:30:09:

The PAC Trust web site is: www.cal-equity.com

Re: Over Financed Houses - Posted by Scotty

Posted by Scotty on June 09, 2000 at 15:47:17:

There are ways of making money on overencumbered properties, and I don’t mean negotiating concessions from lenders with the threat of a bigger loss. If your numbers are right this one is an extreme case, but not unheard of with the 125% LTV programs that were the rage a little while back. Some have raised a question whether that overencumbrance is actually secured by the property or really nothing more than a personal loan. I don’t know that it has been challenged. In any event, you may want to investigate what is known as the PACTrust. It can be used on overencumbered properties as a very effective means to still make money. Some folks have completed these deals with the original owners making a monthly contribution to help offset the overencumbrance due to market conditions, or in this instance taking money out of a property that was really never there.

Try to work with the 2nd - Posted by Monique

Posted by Monique on June 09, 2000 at 09:56:20:


Is the couple behind in their payments? If the 2nd mortgage is in default, the lender might consider a discounted payoff. If you can payoff the 2nd for $3k - $4k, and you plan to hold on to the property for a while (maybe sell through a long term L/O), the deal could be worked.


Re: Over Financed Houses - Posted by Mark

Posted by Mark on June 08, 2000 at 20:55:32:

I’d double check your comps. How can these people get loans that exceed their properties value? I can see that happening occasionally, but it seems that you are running into this problem repeatedly. If your numbers are right, you need to pass on these properties. You would obviously be paying over market.
Good Luck

Re: Over Financed Houses - Posted by Scott SC

Posted by Scott SC on June 09, 2000 at 14:17:23:

Well, unfortunately bad appraisals and shifty brokers account for a lot of houses being over financed. It’s no anomally.

Re: Over Financed Houses - Posted by Soraya(SanDiego)

Posted by Soraya(SanDiego) on June 08, 2000 at 23:52:55:

What about these lenders advertising 125% LTV loans?


Thanks Mark now… - Posted by Sammy

Posted by Sammy on June 08, 2000 at 21:19:23:

I use OCTITLE for my comps and I was thinking like you mentioned. The banks loaned against these properties so they should be in the ballpark. Is OCTITLE not so accurate or should I use a realtors comps.