Pre Foreclosure Advice
I am meeting a pre foreclosure owner tomorrow. Here is the info according to phone conversation w/ owner today.
May 4 sherriffs sale date. Says he is planning on letting it go and would want to get out for what he owes on it.
Updated home across from a lake w/ dock/beach rights. I am seeing it tommorrow. Not sure of comps yet but I am getting some comps from a RE agent.
He had it listed several months ago for $369,000 and no offers.
271k first at 6.375 GMAC approx 2000/mo
67k 2nd at 9.25 w/ EMC approx 550/mo
According to owner he is 3mos behind on 1st and 2mos behind on 2nd. approx 7,000 total but i am assuming he is not counting late fees/penalties
any advice on plan of attack and other info i need to analyze when i meet w/ him?
try to short the 2nd mortgage and take the 1st subject to or pay it off and refinance? i do have the cash to buy the home but dont want to tie it up if i dont have to. Would the 1st mortgage holder entertain short sale if I presented a cash deal? or will they wait til sherrif sale and market it then?
Thanks in advance for the advice from all you gurus!
I did some research in county records and those amounts of 271k and 67k are original amounts of 1st and 2nd in 2004. Do I get a POA signed to get the payoff amounts to determine deal potential?
got authorization and getting mortgage info. a couple comps are 2 properties for sale on same street. 286k and 330k, looks like the 2nd and the 1st need to be shorted for this deal to make sense. i doubt there is much equity built up since 2004 on these mortgages.
More than likely the transfer was to to a servicing problem... FNMA told the Servicer that they screwed up, and as such, was ordered to take back the property.
Thanks Shortsales pro,
Now I know.
Would u make the bank an offer of the amount they had to take it back for or more.
They are asking 81,900 , and records show they got it back from fnma at 56k cash.
Thanks !
[addsig]
Thanks Shortsalespro ,
For all your wise advice and replies.
[addsig]
Most likely they recorded their contract which puts a cloud on the title making it hard for the seller to sell to someone else. It can be effectively used to protect a buyer when the seller wants to go with another later offer.
Radio52, you are a gem! Thank you.
[addsig]
I’ll have to both disagree and agree.
I agree that this is not a good deal, but mainly because the numbers don’t work out. 50K in equity on a deal of this size is not that much. You’ll have a lot of costs that will eat that away. 9 times out of 10 in these leaseback situations they won’t pay more than a couple months of rent. So, you’ll have holding costs for the couple months it takes to evict, then you’ll have fix up costs and selling costs. 50K equity on a 140K house is worthwhile, but not on a 240K house, in my opinion.
I’ll have to disagree that the sale leaseback is not a viable option. It’s a great option if:
1. there is a lot of equity. Like, 70K on a 145K house. That’s plenty to cover any holding, eviction, rehab, selling, etc. costs.
2. You spell out CLEARLY in your contracts that this is a sale and that the owners are aware that they are selling and this is in no way a loan. State this clearly several times in the closing documents. Have them sign a separate form that addresses this only. For added protection, bring a tape recorder and tape the closing.
That’s my opinion anyway.
A title search would reveal what you have found yourself. A title company would send a researcher to the same register of deeds that you went to. It is not an uncommon thing that a lender "forgot" to issue a release.
The only way that I can think of is to go speak with the owner and try to get an authorization for information for the mortgage company just to check.
Maybe check with a title company to see if there might be something else.
Most title searches cost around $75. You are asking for major trouble down the road if you try to do this on your own. Buying at the courthouse can be very risky, especially if you do not know what you are doing.
Bargain is right. You must pass clear title when you sale. Having the search done by a title comp or attorney in the beginning will save you much headache down the road. Plus you need a good title comp or attorney as part of your team if you want to be an avid investor.
look up the previous owner and ask if he held the note. Get a satisfaction from him and record it yourself.