What is the best way to work with banks on over leveraged properties? My father passed away on 12/18/2012. There are 5 properties that had loans against them. Our estate attorney suggested we "abandon" the properties legally. We did so. Going on two years later the banks have still not done much of anything with the properties. The city has boarded one of the houses.
I have tried talking to the bill collectors who call but have not gotten too far. The estate has been closed. I was the executor of the estate. There are a couple properties I would really like to get. However I do not want to pay the bank what my father owed on these properties. Do any of you have any suggestions on dealing with the banks. It is my understanding the bank will not short sale the properties to me because I am a blodd relative. On paper it makes sense to keep making the payment dad was making and keep collecting the rent. It looks to be cash flow positive. At the time it was more than I could handle. Personally, I do not want to overpay for a property only because it cash flows on paper.
Any information you all can provide would be greatly appreciated.
Just an idea here--go after the Note that the bank holds. See if you can buy the Note (and therefore, the mortgage) at a discount. That way, you would "owe yourself" less money than what was owed to the bank. Use a private lender and if the spread is good enough pay them back via the cash flow from the properties.
What does it mean to "abandon the property legally"? Someone still owns these as the outcome of the probate/will process. You would buy them from that someone.
Why focus on these properties. The relationship will make buying them via short sale difficult. There must be other properties that would fit your investment needs and won't have the baggage these do.
thank you both for the input. Both seem like good advice. I have been focusing on other properties. I just know these properties are going to end up being a good investment for someone in this market and figure that someone might as well be me. I think to legally abandon a property gives the property back to the bank with no contest. I'm not positive though.
I think to legally abandon a property gives the property back to the bank with no contest.
Giving the bank to the lender would be a "deed in lieu". If that was done, the bank owns it. Its unusual, though. Banks don't usually do that, but it is possible. If so, you would buy it from the bank. No short sale because the loan would have been wiped out.
Get on the county recorder's web site and figure out who owns this. If its still in your dad's name, then the heirs own it.
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