The odds of getting all the judgment holders and the IRS to discount enough to avoid foreclosure are slim to none. But if you have a week or so free time (I doubt it) to devote to negotiating with all the creditors, then knock yourself out. I think buying the 146k note at a discount which you are comfortable with (and then finishing the foreclosure) is the only realistic option. No matter what you decide your first step must be to buy the note at a discount. What you, and your friend (BK?), do after that depends on your goals.
Possible pre-foreclosure deal - Posted by Ben (NJ)
Posted by Ben (NJ) on February 18, 2000 at 11:34:27:
A guy I grew up with is about to lose his home. Nice house in nice neighborhood but needs alot of work. Bank is very close to getting final judgment in the amount of $146,000 and then scheduling a sheriff’s sale. There is also another $60,000 in federal and municipal tax liens which would not be extinguished by a sheriff’s sale. House “as is” is probably worth $135,000 so it is seriously upside down. Any opportunities here? I have a feeling the bank would be willing to take a big discount to get rid of this headache. I also have the cooperation of the property owner if I needed it. There are a dozen or so judgments which would be cleared by the sheriff’s sale so I am tempted to let it go to sale just to make it cleaner but then the bank would just bid it up to $146,000. What about the IRS, are they likely to discount what they are owed? (about $50,000). I also know the company that owns the tax lien since I am in that business and I may be able to get them to discount a little bit too. Would it be worth getting a quit-claim deed from the owner and then trying to hammer everyone down? Sorry I am babbling but I would like to help him and/or me if possible. Sooo confused! Thanks for any help!
Re: Possible pre-foreclosure deal - Posted by Bill K. - FL
Posted by Bill K. - FL on February 19, 2000 at 09:42:32:
Hi Ben,
I like JD’s idea about buying the first mortgage at a discount and then foreclosing. You need to find out the priority of payoff on the foreclosure sale proceeds in your state. In FL 1) Auctioneer or broker
2)RE taxes/certificates,county and municipal utilities
3)Recorded mortgages 1st, 2nd,3rd 4)Mechanics liens 5)IRS 6)All others. So I don’t believe you would have to be concerned about IRS liens. But definitely RE taxes/certificates and any municipal liens. This way you would just have to negotiate with the bank.
Re: Possible pre-foreclosure deal - Posted by NJDave
Posted by NJDave on February 18, 2000 at 20:46:16:
A report entitled, “Opinion of Value Pursuant to a Lienholder’s Net Recovery of a Foreclosed, Non-Performing Asset” would probably indicate a value much, much, lower.