Should he stop making payments? Short Sale 2 - Posted by Matt

Posted by Tim- chi on September 25, 2003 at 11:31:00:

Matt,

Call lenders in your area and tell them you’re taking title to a property and you that you would like to refinance post sale. You may want to get a copy of your credit report (including your FICO score) that way you avoid having 3 or 4 lenders pulling your report which will adversely affect your credit score. They will let you know if they can work with you. As long as your credit worthy you should be able to find a lender.

Good luck,
Tim

Should he stop making payments? Short Sale 2 - Posted by Matt

Posted by Matt on September 24, 2003 at 22:50:24:

Should my brother stop making payments so I can negotiate either a short sale or lower interest with the current lender??? My brother owes $130k on his house and it is worth about $160k. The problem is his credit is shot so he has a 14% interest rate and the payments are too high for him. He asked me to help him out and see if I can take it over for him and with my credit and get a rate below 8%. He would continue to live there and make the payments. I could use the extra tax benefits and gain from the future appreciation. I’ve been talking with a lender and they want me to come up with more money down (which I don’t have) because it’s an investment property. My brother would like to make about $30k from the deal but the most important thing is getting the payments down and he can wait for his
money.

Thanks!

Re: Should he stop making payments? Short Sale 2 - Posted by Tim- chi.

Posted by Tim- chi. on September 25, 2003 at 08:46:27:

Matt,

Have you considered taking the property subject-to the first mortgage and approaching potential lenders as the owner looking to refinance rather than a buyer looking to purchase the property? If you purchase with financing the lender will often focus on your purchase price rather than the appraised value. Be sure you have a lender lined up before you take title and let them know you have a tenant ready to lease the property.

By the way- are you the same individual who posted a similar fact pattern also raising the issue of your brother possibly filing bankruptcy? If so, be careful (I know I wrote this in that other thread) as the bankruptcy Trustee will scrutinize the transaction to determine if there was any equity that could have been included in the bankruptcy estate to pay other creditors.

Good luck- I hope you can work things for your brother.

Tim

Re: Should he stop making payments? Short Sale 2 - Posted by Matt

Posted by Matt on September 25, 2003 at 09:36:08:

Thanks Tim, as for the bankruptcy he is going to wait on that. His first priority is getting the payments down on the house. If I take over the property subject-to will there be any issues as to how long I’ve owned the property if I was to refi???