Need Advice - Newbie To The Game...
I have a friend who is in Foreclosure and I want to get her property - she still owes 70K and 4K in the rear....how can I get this from her by paying the rear.
Thanks
I have a friend who is in Foreclosure and I want to get her property - she still owes 70K and 4K in the rear....how can I get this from her by paying the rear.
Thanks
As mtnwizard said, new state laws are popping up all of the time. I would definitely check to make sure you’re in compliance. I know here in CA they’re pretty strict on buying from people in foreclosure.
BTW – Your comment about being $4k “in the rear,” instead of “in arrears.” Now that’s funny! LOL-LOL
Answer these questions
1) what is the after repair value of the property
2) what is the cost of repairs
3) what is the 1st mortgage payoff
4) what is the 1st mortgage reinstatement
5) what is the PI of the 1st mortgage
6) what is the 1st mortgage terms - ARM, Fixed, rate, PMI, etc?
7) repeat questions 3-6 for each mortgage
what are the taxes and what would be the insurance
9) are there any other liens or judements on the property
10) what date was she served the les pendens?
11) is the property vacant, rented, or owner occupied
12) does your friend want to save the house (keep it), sell the house, or just get rid of it?
1) what is the after repair value of the property: 135K
2) what is the cost of repairs: 5K – 10K
3) what is the 1st mortgage payoff: 72K
4) what is the 1st mortgage reinstatement: 4K
5) what is the PI of the 1st mortgage: not sure
6) what is the 1st mortgage terms - ARM, Fixed, rate, PMI, etc?
7) repeat questions 3-6 for each mortgage
what are the taxes and what would be the insurance: taxes 1K ins. About 1,200.00
9) are there any other liens or judements on the property: no other liens
10) what date was she served the les pendens? 12 July 2006
11) is the property vacant, rented, or owner occupied: has been vacant for 3 months now
12) does your friend want to save the house (keep it), sell the house, or just get rid of it? Get rid of it to save credit
What part of town is she in? Some areas have stagnated... others are still active.
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This is still a very good part of town - property will go for 130K - 135K - I think it would make for a good flip...?
Were anyone able to help me on this process please...
I dont know much about forclosures but it sounds like a sub-to deal to me, got to the subject to forum and READ READ READ.
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here I will clarify a little better....subject to means you just take over her mortgage payments, pay the back payments...fix it up if you want to and pu t it on the market and sell it, and give her a percentage of the profits or none at all, depending on how nice u wanna be. Make sure you do a good contract and pay those late payments before the forclosure!
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MiamisCraziest – Thanks for the advice…
Lol….Thanks fro the advice - mtnwizard but I am not doing anything to her – she lives in ATL and no longer wants to deal with the property….
I use the MAO (maximum allowable offer) formula to see if something is a good deal.
(ARV (after repair value) * .7) - repairs = MAO
(135 * .7) - 10 = 84.5
So the Payoff of 72k is good.
Get the following paperwork
1) POA - notorized
2) Deed - notorized
3) Cover your Ass letter - signed
4) Authorization - signed
5) loan information - have them complete info sheet
6) contact informtaion - have them complete info sheet
Fax the authorization and POA to the lender and get a payoff and reinstatement faxed to you. Have the title company run a title search.
If the title search, payoff, and reinstatement all look good, then reinstate the loan. Have the lender change the mailing address to your mailing address. Repair the house. List it and sell the house.
Quote:
On 2006-12-13 15:05, bgrossnickle wrote:
I use the MAO (maximum allowable offer) formula to see if something is a good deal.
(ARV (after repair value) * .7) - repairs = MAO
(135 * .7) - 10 = 84.5
So the Payoff of 72k is good.
Get the following paperwork
1) POA - notorized
2) Deed - notorized
3) Cover your Ass letter - signed
4) Authorization - signed
5) loan information - have them complete info sheet
6) contact informtaion - have them complete info sheet
Fax the authorization and POA to the lender and get a payoff and reinstatement faxed to you. Have the title company run a title search.
If the title search, payoff, and reinstatement all look good, then reinstate the loan. Have the lender change the mailing address to your mailing address. Repair the house. List it and sell the house.
bgrossnickle....How can I sell it if she still holds the loan...? email me at **Please See My Profile** please
The mortgage/note and deed are two different peices of paper. Someone can own a property but someone else has the financial obligation to make the payments. This is called Subject To investing.
You tell the owner that you will reinstate her loan, but that her loan will continue to stay in place until you can repair and then resell the house.
There is not enough time to fully discuss Subject To investing.
unless I am incorrect, the POA gives you the right to treat the property as it is yours, a warranty deed or QCD may be better in some cases. be fair. if she just wants out then all bets are off. make sure you get everything in writing and are VERY clear as to your intentions. I have had this situation before and the person became bitter 6 months later. I suffered not ill effects from their bitterness, but it could happen.
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If you were to buy the second via an assignment, you would step into its shoes.... you would have to complete the foreclosure before taking title to the property.
Once you (as second mortgagee) have successfully completed the foreclosure (presuming the homeowner does nothing to impede proceedings)
you can payoff the first mortgage.
Thanks TheShortSalePro. Rather than buying the second mortgage as an assignment, I can also buy it at the foreclosure auction, correct?
jsd2 - You need to consult the appropriate laws in your state to determine whether you have any legal standing with respect to the first.
In every state that I am aware of part of the protection of being in a junior position (holder of 2nd) is that you have the right to reinstate the first to protect your position. Normally after this is done the second note holder then files Notice Of Default and begins foreclosing under the second with the idea that the sale under the second will occur before there is another default on the first. At the sale the second will be paid off if bidding covers it. If not , the holder of the second will own the house subject to the first loan.