Tightest Foreclosure Deadline Yet!

This is my first blog post, after many comments on BP, so let me know your feedback! Let me back fill a little on this story so you understand the situation. This story started almost 6 months ago. One of the properties I had pre-qualified as meeting our requirements to be able to work with as a pre-foreclosure was contacted with our standard "tape to the front door" direct mail campaign. About three weeks later, I went by to tape the door again but there was an elderly Hispanic lady working in the yard. As I approached I ask if she was "insert owner name". She told me she was her mother. I handed her our contact envelope, and asked if she would please give this to her daughter and thanked her for her time. About a week later the owner contacted me to find out what our company could do to help her. I explained we work with homeowners in distressed situations and particularly with pre-foreclosures. We talked for a little while and scheduled an appointment to meet so I could look at the paperwork she had received from the bank, as well as get an inside look at the home.

The owner had been running an elderly care home for several years but had gotten sick and needed surgery so was unable to continue doing home care while she was recovering. She had some savings to carry her through but unfortunately it took longer to recover and get new clients back in place. The bank she had her financing with had said they would be willing to do a loan modification because of her circumstances, which she was working with at the time we met, but wanted to see what other options were available to her. Our company goal is to help people, even if it means we don't make money by pointing someone in the direction to get help and it's not with us. I found out more of her particulars and understood her goal was to stay in the home and just add another client or two in order to get back on her feet. I had a point of contact with a local agency that deals with Elders and made a call while I was talking to the owner to see if the agency had any people needing in home care services, which they did, and exchanged their information so they could work together. Since she was already working to do a loan modification, I told her we probably wouldn't be a good fit but if the loan mod didn't work or something changed and it got closer to foreclosure to give us a call so we could work our program as a last resort.

Our company has a watch list set up with the local trustees office database so when a property has an update, we are notified by email whether it's a postponement, bankruptcy stay, cancellation, or the minimum bid amount if it goes to auction. We monitor these to keep a finger on the pulse of what's going on with pre-foreclosures even if we are not working with that property. In our area, because you have to have cash in hand at the courthouse, we see about 75% of all foreclosured properties revert back to lender. On this particular property, we were notified as the sale date was postponed a couple of times and we just assumed she was dealing with it and working with the bank.

One day recently, January 2nd to be exact, I received and email that gave me the minimum bid amount on this property. The only time we see the bid amount is if the property is expected to be sold at auction immediately, and it was, at 10am the next morning. So I called the owner and left a message that we had just got an update of bid information and asked her to please give us a call back to see if we could possibly help. This was at about 1:30pm. She didn't call me back until 5:15pm, after closing hours for the trustee's office. Explained that she had lost our number and was afraid of losing everything. I told her it was very late in the process, but if she was willing to work with us and our program, I could come over later with the documents and see if we couldn't stop it the next morning. So far our tightest timeframe had been 3pm the day before the auction for getting it stopped. We met, signed the papers, made sure she understood this might not happen due to the timeframe. In between, I was moving money around and calling a couple private investors to explain the deal and see who would come up with the money by the morning. One investor we work with has set up an account with the same bank we use for the business in order to make transferring money between account easier and online. So by the time I met with the owner, the money was already ready and waiting.

First thing the next morning I head to the bank to get a cashiers check at 8am. The Trustee's office opens at 9am and the auction is at 10am. So I am starting to feel the pressure. Of course the next morning is January 3rd, a Friday, the bank has two lanes open and only one teller working with six cars ahead of me. I'm checking my clock every 3 minutes, watching the line slowly move. Some lady in the other lane is very upset and has caused the line to stall just as I get my turn at the drive-up in my lane. By now its 820am and I'm definitely feeling the time crunch. The teller comes to me, apologizes for the delay and says she will be right with me. At this point I can see the manager in the background and we have talked in the past and he knows my business and how much money we move around with them. So I interrupt her and ask if I could speak with him. He comes to the mic and asks how I'm doing etc and I explain I need a cashiers check because I have to stop a foreclosure before 10am. He personally goes and makes the cashiers check for me and sends me on my way. It is now 835am, and Ms. Irate Lady is still going off as I pull away to make a speedy trip to the Trustees, arriving at 903am. I head to their office, and because I have worked with them in the past, asked for my favorite person who gets stuff done promptly. I explain the situation and she makes a call to see if we can do it. I'm waiting with my breath held the whole time. She comes back and says we can do it, just has to call the courthouse to notify them. The time 915am. 45 minutes before it was scheduled to be auctioned. Talk about relief. Wow, deep breathes afterwards. Called the client and let her know we got it stopped and set a time to go over what comes next in our process.

It sounds like we were very lucky. And we were, but a lot of things came into play. The constant contact with the owner, monitoring the property, the networking and relationships built with our private lenders, our bank, and the Trustee's office as well as our tenacity to follow up. These all came into play and show how valuable each is to the whole process. Thank you to all those on BiggerPockets who have shared their stories and knowledge that led us to create our networks, systems, and relationships in order to make these kind of deals happen!