Has anyone discounted a lien after the auction Sale?

Comments(11)

• 
  markoarko21st May, 2003

  I have a bulk purchase agreement with a group of lenders, If youd like...email me information on the deal and I will see if I can discount the note.

• 
  man21st May, 2003

  What is a bulk purchase agreement? Does this mean you have agreements with certain lenders and they will automatically discount mortgages that will go into foreclosure? Enlighten me
  
  Quote:
  On 2003-05-21 21:38, markoarko wrote:
  I have a bulk purchase agreement with a group of lenders, If youd like...email me information on the deal and I will see if I can discount the note.

• 
  tbelknap21st May, 2003

  markoarko, I didn't ask for your help in discounting the note. I wanted to see if anyone discounted a note after it went to the sheriff's sale.
  
  Tom

• 
  daveh22nd May, 2003

  I have not personally discounted after the sale but everything in business is negotiable. But, let's look at this logically.
  
  If the 2nd holder has a strong equity position, i.e., there is a small 1st ahead of them, they probably will just take the house back and resell unless you make them a very tight (not much profit) discount offer.
  
  If the 2nd has a poor equity position (big 1st ahead of them), then you need to ask if this is really a deal you want to get involved in. You will need to make the payments on the 1st until you can get possession and get the house resold or the 1st will foreclose and wipe you out.
  
  2nds in foreclosure are tough. You need to thoroughly analyze the numbers and motivations.

• 
  tbelknap22nd May, 2003

  Thanks Dave. The second will have to cough up 126K to pay off the first. There is only 20K of equity after the mortgages. It will probable take them a year to resell and make their money back. I am in Michigan as well so as you know there is a 6 month redemption period. I would love a discount of 20k to make it a really nice deal. My thinking is they may not have a problem with the 20k if it will take that long to get thier money back. There is not a lot of equity in the house to make a great amount of money, especially if they have to wait close to a year.
  
  Also, if the second is in foreclosure, don't they pay off the first at the sale? Or am I missing something.
  
  Tom[ Edited by tbelknap on Date 05/22/2003 ]

• 
  TheShortSalePro22nd May, 2003

  Curious as to whether you have the Homeowner's cooperation?
  
  If you had their cooperation and were named as Contract Purchaser, you could certainly approach the lienholder with a short sale proposal, and substitution/assignment clause (allowing yourself to step aside in favor of an equally qualified Purchaser).
  
  You would then, via a separate agreement, negotiate your compensation paid directly to you by the Replacement Purchaser... and not appear in the closing/settlement documents.

• 
  tbelknap22nd May, 2003

  I do have the home owners cooperation. It only takes 5 weeks to got to auction. The house is in mint condition. Not really interested in doing a short sale. There is 20k in equity (I am verifying that with the legal fees added). I was thinking of retailing it then approaching the lender for a discount when I find a buyer. This will more than likely happen after the auction sale. Like I said, I won't ask for a 50 cent on the dollar discount. They will have 6 months to wait for redemption. It is taking on average 5 to 6 months to sell a house here. I would think they might entertain a discount to relieve them of this burden. Maybe not a huge discount but any will put more money into my pocket. Also, if I discount the mortgage then I know they will not issue a 1099 to the home owner. He is starting to get his life in order and I would like to keep him from having a big tax bill at the end of the year. At the very worst I should sell the house, break even, and help the home owner out. Not bad for a worst case scenario.
  
  Any advice appreciated,
  
  Tom

• 
  TheShortSalePro22nd May, 2003

  I'm not sure that I entirely understand what you are asking. It seems that you want to purchase the mortgage via an assignment at a discount? If so, the short sale process would mirror what you are trying to accomplish.
  
  Your Proposal and argument in support of financial concession would have to justify a discount. Yes, it's fairly common.
  
  The majority of Sellers who participate in a short sale do not incur an exposure to a liability to income tax.

• 
  tbelknap22nd May, 2003

  The question I asked is in the title of this post. If it mirrors a short sale then I should be able to work with the bank on a discount after the sheriff's sale. I was under the impression that a 1099 was pretty normal to get when sellers short sale their property. Now why would the bank want to know the hardship of the seller if you are asking for a discount? I would think that by breaking down the amount of money they are losing over the year would justify the discount itself.
  
  
  Tom

• 
  TheShortSalePro22nd May, 2003

  "I was under the impression that a 1099 was pretty normal to get when sellers short sale their property."
  
  Yes. That's correct. Those that benefit from debt forgivness (be it secured or unsecured debt) do receive an IRS form 1099 for the amount of the forgiven debt. That doesn't mean that they have a tax liability. They might, but it isn't likely.
  
  Tom, I'm sure that you'll agree that many people that post on this (and other) board(s) use words or phrases interchangably. They don't write what they are meaning to say. That's why I try to be very clear on what is asked.
  
  Good Luck with your post sale discounting.

• 
  tbelknap22nd May, 2003

  I have no problem with you or anyone asking for clarification. I can understand how miscommunication can happen through these message boards. I would rather you ask then lend advice then to assume I meant something else and give me advice based on that.
  
  Thanks for taking the time to post on my question.
  
  
  Tom