Bank Won't Reinstate W/o Financial Info?
I had a deal last month where I was going to buy subject to existing loan. It was just days before the auction. I was going to pay off $16,000 in back payments including fees etc. then continue with the monthly payments. Of course, I was not going to let the bank know that I was the new owner. When I called and told them I was going to reinstate the loan, they said that I would have to submit owner financial info as proof that she would be able to make the payments in the future. The property is in Florida and the guy at Option One who was telling me this was just a $10/hr phone monkey. But here's my question: Could they actually go thru with the foreclosure if I re-instated the arrears, but did not send them proof of positive financial ability for the (previous) owner? Anyone have a similar experience or opinion?
Hey,
By sheer co-inki-dink, I am in the Loss Mitigation business earning way less that $10 an hour working out folxies problems on the phone - hehe.
In every case I've mitigated (many per month), the lender did a last minute credit check on the debtor AFTER analyzing the debtor's financial statement that we sent to them. It's routine in other words. Why reinstate a bad loan?
So, what you're saying is that I wire them the $16,000 and then they pull the owner's credit -- how could their credit report actually improve in that amount of time anyway? So they won't credit the arrears to the account? They will just refuse and follow thru with the foreclosure?
In that case what are we doing here!!! If we can bring the payments current and still have the bank foreclose then we need not quit our day jobs......................
Hey...this concerns me...does this happen with every mortgage company...I'm wanting to concentrate in the preforeclosure area to legitimately help people who have honestly through unfortunate circumstances led them down this path and who are now in a better financial position to continue making timely payments....
I believe by right the debtor has the ability to bring the loan current, in accordance with the Notice of Excelleration as agreed to when the note was establish, which I believe is based on state law.
"Whoa, where did that come from. Was I an attorney in my past life?"Thinking to myself
Everyone has the right to catch a loan up. You just have to be aware that window of opportunity.
And besides... Why did you tell them it was you and not the debtor sending in the payment?
The key phrase here was,
"It was just days before the auction"
$16K is way too much for a sub 2 deal unless your picking up close to $100K in equity.
Put this one down and move one. You can't do anything about this.
The lender doesn't want to deal with this one anymore.....your fighting an uphill battle on this one.
nebulousd!
what is your formula that you use as a minimum amount that you will invest in a sub2 deal...could you possibily give us newbies an example of a feasible sub2 deal...that is minimum/maximum...if that makes any since...thanks!
Yeah,
Pay as little as possible. I prefer not to make up back payments because those are the most expensive deals. If everything is current, seek the motivation and understand why they HAVE to sell.
There is no formula...I have a house with 40K plus equity in it and I paid 5k for it. I only paid that because that's what they owed in back payments.
I paid 2300 for a house with about 20k equity in it....again, that's what was owed in back payments.
However, I'm sure $Cash$ and LV would tell you that they have picked up houses with lots of equity and only paid 500+...and there were no back payments to be made.
There really isn't a formula....only a concept. Pay as little as possible. 16K is a lot.....and since I have a 40K plus house with equity and only paid 5k.....if your coughing up 16k, how much equity would you be looking for.
Don't become a motivated buyer.
I disagree with nebulousd.
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nebulousd said I quote:
"$16K is way too much for a sub 2 deal unless your picking up close to $100K in equity."
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everyones cash to invest is different, so therefore you need to count the costs before you jump.
In otherwords if an RE investor had 550k to invest , a 16k investment to make 5k quick he may do it. How ever if a RE investor only had 20k to invest, so to the same, to make the same he may not.
I dont beleive there should be a formula based on the deal but the formula should be based on your investment capitol and goals.
For me, I am in the car biz. I do over 1500 cars a year and my investment capitol is large and my money cost is zero. So it doesnt matter to me if i make the same $$ on 100k car or a 1k car. The profit all ads up to my yealy income at the end of the year. My situation puts me in the position that a "steady drip fills the bucket"
So in other words do what falls within your comfort zone.
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B.G. & Wheeler D. LLc Inc.
(A division of: Half Vast Enterprises)[ Edited by WheelerDealer on Date 12/17/2003 ]
I only read a few of the posted replies, so if this is redundant, I apologize.
Foreclosure laws and customs may differ from state to state, and even from county to county. In many cases, a foreclosing mortgagee doesn't have to reinstate a loan. It may choose to reinstate, and often does, but isn't required to do so.
If the original poster unilaterally sought and funded a request for reinstatement and that request was denied... the check would be sent back to the mortgagors... or, perhaps kept and applied to any deficiency... but as I said, laws and customs may differ.
I get mortgages reinstated for homeowners all the time. The mortgage company cannot refuse to accept the payment if it is for the full amount of the arrearage. I have had to give them a cashier's check 5 minutes before the auction. It is when you want to do a loan modification or FHA partial claim that the income verification is necessary.
Option One is notorious for crooked collections and is on the hit list for the MD State Banking Commission for investigation into their collection practices.
If you want any more info or help, just send me a PM, I would be happy to discuss this with you.
Barbara
Barbara, your statement, "The mortgage company cannot refuse to accept the payment if it is for the full amount of the arrearage." is misleading, and incorrect.
While this may be your experience in your state, it is not true everywhere.