Preforclosure Question - Posted by BMH, PA

Posted by Chan Lipscomb on April 07, 2000 at 13:47:56:

This deal is probably too close. Once you make up the back payments, you only have 5K to work with, and that will get eaten up in legal fees, court costs, and closing costs (unless the market is really moving up and the house is worth substantially more than what she paid). Check the comps just to make sure, but you will probably want to pass.

Preforclosure Question - Posted by BMH, PA

Posted by BMH, PA on April 07, 2000 at 08:30:05:

I ran a “we buy houses” ad in the weekly pennysaver newspaper. I got a response from a distressed woman. She and her husband own a 3 bedroom single house. Presently, she’s looking to sell her house because she is in the early stages of the forclosure process. She wants to sell quickly to stop the foreclosure process and to save her credit. Foreclosure has already been initiated. She owes $10,000 in back mortgage payments. Her monthly payments are $1,355. She says that there is possibly $15,000 worth of equity in her home (before she moved in), however, she’s only been in the house for two years. The house is 2 years old and she’s had to pay for construction as well as the mortgage and she can’t afford to pay either, plus she feels that her construction company did not complete everything that needed to be done to the house. She wants to get rid of the house, avoid foreclosure and possibly rent somewhere else in the same neighborhood. I told her that I needed to get back with her with some options. I need some help. I am new at this.

Re: Preforclosure Question - Posted by Ben in Ohio

Posted by Ben in Ohio on April 08, 2000 at 06:41:24:

You may want to contact the mortgage company and negotiate. You will need a signed release from the owner. Then, you can ask for time with forbearance. This is useful if the owners are in a temporary bind and can catch up in a few months. In this case, you might charge them a fee of sorts, whatever you feel is fair.

Or, discuss a short sale with the bank. You will need a pretty good idea what you are going to do with the house if they accept a short sale, and generally it’s a cash sale. Line up your end buyer ahead of time for simul closing or assignment. The key to short sale is cash. If you are successful with the bank and can perfrom you may have future opportunities with the same lender. However, of you cannot perform, you will lose credibilty with that bank. E-me if you like and I will help you through it.