Forclosure And Bankruptcy.....commercialking Or Anyone??
Commercialking,
Thank you for responding to my post HOW TO DO A "QUICK" SHORT SALE of 3/25/04 in the Short Sale Forum;
"Actually the bankruptcy is good news. You want to call the attny thats representing the first mortgage holder in the foreclosure. Tell him you want to buy the note at a discount and step into the banks shoes on the foreclosure. At least imply that you want to continue to retain his firm to handle the foreclosure for you. Get him to go to his client and get a number at which they will sell. Do not make an offer. Express interest. Ask for a price. You are, as I understand, ready to pay 100 cents per dollar. My guess is the bank will request considerably less than that. Believe me, the bank is more frustrated with these delays than you are, they are ready to get rid of this headache."
Can you or anyone answer a couple questions about this?
If I "stepped into the banks shoes" will the foreclosure go on as scheduled or will I have to start over with the foreclosure?
If I was the foreclosing party and someone showed up at the aution to bid what is the process I would take to retain the property? Could I just bid like anyone else to either outbid or be outbid?
Thanks
1) Yes, the foreclosure would go forward as scheduled except that you would be delayed somewhat as a result of the bankruptcy filing.
2) Now see, here is the beauty of the thing. Lets say there was a $100,000 first mortgage and you convinced the bank to sell to you for $50,000. You still have a claim in foreclosure for $100,000 plus attnys fees. So if at the auction someone else bid $110,000 (forget about the fees for the moment) you could bid $120,000. Let us assume that you were the successful bidder at that point. You need only pay $20,000 since you can trade in your judgement for the first $100,000. So, eventhough you "paid" $120,000 (your mortgage plus the 20K) it onlyl cost you $70,000 (what you paid for the mortgage plus the $20,000).
Now, let us assume that you decided, not to out bid the $110,000 bidder. You still get paid your $100,.000 mortgage/judgement (the other $10,000 goes to the title holder or other leins, or in this case to the bankruptcy trustee) which only cost you $50,000 so you make money even if you are not the successful bidder.