Posted by Chance on February 03, 2002 at 02:10:42:
I’ll take a stab at it, what they hey!
Question 1: Over here (East coast) if the bank forecloses, the owner is “off the hook” as far as payments, he just has “shot” his credit and can forget about buying another house for awhile, or even renting anywhere nice for that matter.
Question 2: You need to find the owner BEFORE the foreclosure proceeding begin. Once foreclosure starts the banks usually won’t talk about selling because they give the property control over to a special division that sets up a bidding procedure (those foreclosure notices in the Sunday classifieds). They don’t have a way to sell their foreclosures, they just run them thru their usual procedures like an assembly line. There are certain instances where you can talk to special departments of the holding bank on foreclosure properties but finding out who they are and negotiating with them is like pulling teeth.
You can find out who holds the mortgage by going down to the records office of the city of the residence.
Question 3: Best bet in my limited opinion is to find the property owner and offer them a cash payment to take it off their hands for cost. At 180,000 for a 240,000 house + 5,000 cash to owner = 185,000+ 12,000 septic =197,000+10,000 rehab=207,000 taken from 240,000=$33,000 profit if you sell it yourself.
There are other ways but this is one simplified solution. Anyone else?
Posted by Bill D on February 02, 2002 at 16:52:35:
I have come across a property with a foreclosure pending. It was brought to my attention by an RE agent who is a friend of my family’s. One of his associates is the listing agent.
The scenario:
The home went under contract sometime last year, but that contract was contingent upon the buyer selling their house. Well, the buyer never sold their house, and the owner of the house in question has since stopped paying his mortgage. The owner has 2 mortgages on the property and the bank will be foreclosing on Feb. 9th unless the property is sold. The owner still owes about $180,000 on both mortgages (not sure how much to each), and then the township the home is located in is requiring them to make approx. $12,000 in upgrades to the sanitary sewer system to have it meet local codes. My agent has told me that they had been offered as high as $175,000 but turned it down since they owe more than that, and that the owner feels it is better to foreclose rather than accept less than he owes (since his credit is shot already anyway). The homes in this area can be sold as high as $240,000 in good condition. This home would require approx. $15,000 to make it one of the nicer homes in the area. I am interested in buying as a rehab, and selling once the work is complete. It seems that getting this home for $170,000 would be a good deal and allow me to make enough after rehab to make the deal work.
Questions:
Is it true that if the home goes into foreclosure that the owner is essentially ?off the hook? or are they still somehow liable for the payments on the property?
Is there a way to find out who holds the mortgages for this property and try to negotiate with them for a percentage on the dollar to take the home off their hands once foreclosed?
Is there another way to make an offer on the property which makes sense?
ask the mortgage co if they have any "non-preforming assest (paper) that they would like to sell…
also… from experience… When properties start going into forclosure there are probably other financial obligations the the “seller” hasn’t been paying, that may be glitches on the title that could be a deal breaker! … do a title search before much investment!
Posted by JohnBoy on February 03, 2002 at 02:14:21:
Is the $180k owed the balance on the mortgages INCLUDING all the back payments owed or is that without accounting for the back payments owed?
You could just take this over subject to by bringing the payments current to stop the foreclosure. You would need to make sure the loan can still be reinstated. Then by bringing the payments current and stopping the foreclosure, you can take care of the repairs needed and sell the property. Do you have the cash on hand to cover the back payments owed and pay for the repairs needed?
As far as who holds the mortgages, just ask the seller! You will need to get a signed authorization form signed by the seller before the lender will discuss anything with you about the loan. You will also need this so you can verify what is owed and what it will take to bring the loan current.