How to find out how much is owed on the mortgage

7 Replies

There is a short sale I am interested in Colorado. Does anyone know how to find out how much someone owes on their mortgage? This property is in Douglas County, will I be able to find this out on the county website? 

In a short sale, how much is owed is irrelevant. The bank will base their approved price off of FMV, with no relation to the loan balance.

There is only 1 way to know exactly how much is owed on a loan.

Get the seller to authorize their lender to share the information with you.

The only other option would be to see how much the loan was recorded for during the purchase. Check that there are no secondary liens. And then work backwards as best you can based on what you think the terms of the mortgage are.

I think some counties allow you to see the recorded mortgage. If so, you can figure out from there pretty easily.  i.e If initial loan amount on March 1, 2010 was for 100k and their terms were a 30 yr mortgage at 4.5%, you can tell what the payments are and what the amortization schedule would look like to see how much of the principal has been paid off by now.

What you can't tell though is how many payments behind they are, late fees, penalties, etc.

Thats why I would say the only real way to get that number is to get the seller to authorize the lender to share their loan information with you.

As Wayne said, it is completely irrelevant.

It might be irrelevant where you guys are but its been helpful for me.  I go to the local county courthouse website and search public records.  Foreclosures are essentially lawsuits and in my state you can look up most documentation related to these lawsuits including the mortgage amount, interest, and fees they are suing for.

In several cases identifying the outstanding loan balance has helped me acquire homes by putting in an offer in for slightly higher than their lawsuit, however if the short sale is efficient they might be wise to realize that they have more equity and can sell it for more.  Regardless, its a good starting point for offers on homes for me.

@Callum K.  If you're offering more than they owe, it's not a short sale. 

Checking liens filed only gets you in the ball park, you might see that they are underwater.

To know if you do have a short sale, get a payoff request to the lender, usually the owner/borrower can obtain this on the phone. Have them call and ask for a payoff as of a certain date in the near future, where you might close AND ask for the per diem rate, that is interest charged per day beyond that closing date until the next payment date.

After you have the payoff, you'll know what amount you need to clear in your transaction, if the property is worth less, you then have a short sale. At that point, knowing the amount owing lets you know what the lender is discounting.

If the borrower qualifies for a SS, the payoff is rather irrelevant as discounts are treated differently for a lender as to their actual loss, you won't figure that out as a buyer.

OTH, the payoff is a bit of intelligence that may lead you to an offer, especially if there are other liens involved, a senior lien holder will be squeezing junior lien holders to reduce amounts needed to give clear title, you can see how the game may be played out.

Agents or others who specialize in SS become familiar with what a certain lender may accept and what the may demand of junior lien holders, knowing the payoff sets a base line to arrive at where you may end up as an accepted offer. Being too far off may make the lender to take another approach as to marketing time of the property or further valuations. I'd rather have the lender eat part of the pie and get a good deal than trying to make them eat more of the pie trying to get a steal of a deal that may not fly at all.

While the payoff can be rather irrelevant on a buyers side, all loan information can be useful. :) 

We always try to get a guesstimate on 'what's owed' but as the posts indicate it's moot

We do our own FMV assessment, take off 25-30% depending on repairs & make the offer.

(But if we really want it we have gone in higher than asking.)

The best one was a $58k (owed) foreclosure that sat for 5 years, we finally got it for $21k after many offers fell through because of financing issues. Plus the had bank paid a years taxes in advance which were not credited on the close. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.