SS And Increasing Prom. Note F/u
Very long story short, a SS I've been working has turned out unusual. Without going into everything we finally agree to $123K with a $10K prom. note to be paid by the seller. When we went to finalize the deal, the PMI company now wants "$15, 20 or even $30K" as a prom. note and will no longer accept our original agreement. Seller doesn't want the note and would rather see the house go to foreclosure.
I told her I am not advocating this idea at all and advised her to talk with an attorney but threw out the idea of her weighing which would be more damaging to her credit a foreclosure or BK. If she decide a FC then run the idea across her attorney about accepting the prom. note whatever the amount and then file BK which might extinguish the debt all together. AGAIN---I am not an expert in that at all and advised her to speak with an attorney if she would rather not have a FC. She has exhausted all "workout" means with the lender including a payment plan.
Any thoughts from the more experienced?
Thanks--Jim
Her attorney will probably tell her that to agree to a promissory note with the intention of seeking a discharge in bankruptcy... would be fraudulent.
SSP--
I tend to agree with you. It's one of those things you just wouldn't feel good about.
Thanks----Jim
Hey Jim,
I know you have put a lot of time and effort in the transaction above. I am glad to hear that you are advising her to speak with legal counsel on this one, rather than influencing her to do things your way. You have certain saved yourself a lot of future problems!
If you cant get a clean resolution with this one, this transaction may be one that you consider walking away from. I know it is not a exciting thing to do, but I know that you will make a good decision!
BAMZ
Bamz-
Appreciate your www.thoughts.I wonder how many investors go after a few SS and then decide for a different niche out of frustration. I'm no where near that but this one was frustrating.
The most frustrating thing about it wasn't that I "lost" this one but how adament the PMI company was to foreclose. I told the contact person in most cases I'll buy the property at the auction if a SS can not be agreed upon. His response was, "Well, I'm in charge at setting the initial bid at the auction so I'll set it so high you wouldn't want to touch it."
This guy was a total jerk!!!!!!!!!! Worst I've ever come across. So I guess, on to the next.
Thanks again and keep shorting--Jim
WOW--
after a week of having the above conversation the PMI company took the initiative to fire up the discussion with a counter offer. Still high but curiuous on how low I could actually go on this one.
Keep you posted
When I'm not involved, it's easier for me to say. But, I try to keep as emotionally detached as possible in these transactions. "He who cares least wins (generally)" , To me, it's just a business transaction. The ones that go down the tube are just the cost of doing business. I don't chase deals.
Sammy--
VERY GOOD ADVICE. WHEN YOU SOUND DESPARATE FOR A SALE YOU NEVER WIN.
Thanks again--Jim