What Would You Do? Newbie Needs Help
Working w/homeowners who just filed bankruptcy, house in early stages of foreclosure (but in Texas, exempted from bankruptcy.) Value $185K, loan bal. $129K, they are wanting $140K to cover the bal & some cash to get a new start. I would like to move into this house, but trying to keep the emotion out of it....!! Property has a small rental house on it also.
They have 2 other investors coming to view the property early next week.
I think i know the answer to this, but is it ever possible to give them the cash they need and still get a short sale? I spoke w/bank and they would do just about anything to get their money and avoid the full foreclosure.
Thanks for your help
Its a better sub to than short sale. Talk to the bank about allowing you to step into the sellers shoes and take over their mortgage, bring the loan current. With almost $55 in equity behind them the bank is not likely to discount much, especially if they get convinced that you or one of those other investors is going to close. Now all you have to do is come up with $11,000 to cash out the seller and get them to give you a deed. Thats about 6% down on a $185 value, not a bad deal.
If the $11,000 is a stretch talk to the bank about giving you a HEL for the $11,000.
thanks for the help...this particular bank had said they would only loan 70% LTV since the property is rural, so no room for a HEL here. I had considered the Sub-to, is that not an issue with the bankruptcy courts?
Might be, if the trustee rules that you bought at enough of a discount that you were not "fair" to the creditors. How much do they owe to unsecured creditors?
The other possibility is to characterize this as purchasing the first at a discount rather than a short sale. Go to the bank, buy the note, step into their shoes. Foreclose yourself. Give the seller the agreed amount to give a deed in lieu rather than foreclosure. Less likely to be unraveled by the BK court since it looks to them like a secured creditor claiming their security.
what is HEL?
HEL=home equity loan. Took me a few minutes too, when i first saw it...!!