Hard money fail- how to get out

11 Replies

So, my first investment property went sour. Being new, I think I dove in head first without thinking of all the possible issues I could be confronting.

I financed a single family property with a hard money loan. Things were ok for a while but I ran into financial trouble with my husbands business so we ended defaulting on the loan and were 2 months late. We corrected the problem and now we are current on the loan.

Problem is, the company we were set to refinance with is not going to move forward because of the previously defaulted payments. The company we did the hard money financing is singing the same tune. Even though we are now current, it doesn’t seem to matter.

Does anyone have experience with this? Is our only option to just take the loss and go to foreclosure?

Originally posted by @Kimberly Walker :

So, my first investment property went sour. Being new, I think I dove in head first without thinking of all the possible issues I could be confronting.

I financed a single family property with a hard money loan. Things were ok for a while but I ran into financial trouble with my husbands business so we ended defaulting on the loan and were 2 months late. We corrected the problem and now we are current on the loan.

Problem is, the company we were set to refinance with is not going to move forward because of the previously defaulted payments. The company we did the hard money financing is singing the same tune. Even though we are now current, it doesn’t seem to matter.

Does anyone have experience with this? Is our only option to just take the loss and go to foreclosure?

Don't take the loss and foreclose if you're current on the home. That’s a 7-year impact to your credit that doesn't seem necessary in this situation. How long have you had the loan and how many payments have you made that are current? Do you have tenants in the home and if so, are the rents paying for the mortgage? How much is the home worth and how much do you owe? Lastly how long have you owned the home?

Originally posted by @Kimberly Walker :

So, my first investment property went sour. Being new, I think I dove in head first without thinking of all the possible issues I could be confronting.

I financed a single family property with a hard money loan. Things were ok for a while but I ran into financial trouble with my husbands business so we ended defaulting on the loan and were 2 months late. We corrected the problem and now we are current on the loan.

Problem is, the company we were set to refinance with is not going to move forward because of the previously defaulted payments. The company we did the hard money financing is singing the same tune. Even though we are now current, it doesn’t seem to matter.

Does anyone have experience with this? Is our only option to just take the loss and go to foreclosure? 

how did take out lender know you missed two payments this is very common scenario and HML don't report to fico they should have just put in a payoff demand.. not no one should know you missed a couple payments.

 

@Brett Goldsmith it is an investment property. I have two tenants currently residing in it. It has equity in it. Purchased it for 187000 with rehab included in that amount and it appraised for $280k.

I have not looked into a hard money loan. I am worried since my credit dipped to 761 (I used to be close to 800) if that would hurt my chances. Also, debt to income ratio isn’t ideal.

@Shaun Weekes I have owned the home for 10 months and my hard money loan is up coming December 2019. It appraised for $280k and I owe $187k. I missed two payments and am now current one month. My money woes are clearing up so I am not concerned about not being to able to stay current but more concerned than I can’t refi out of this. I have two tenants paying $2k total and it pays for the mortgage. I typically can net a very small $250 a month.

Originally posted by @Kimberly Walker :

@Shaun Weekes I have owned the home for 10 months and my hard money loan is up coming December 2019. It appraised for $280k and I owe $187k. I missed two payments and am now current one month. My money woes are clearing up so I am not concerned about not being to able to stay current but more concerned than I can’t refi out of this. I have two tenants paying $2k total and it pays for the mortgage. I typically can net a very small $250 a month.

 I will pm you.

Originally posted by @Kimberly Walker :

@Jay Hinrichs I have no idea. I imagine they included in the payoff when I requested it for the other lender. I have been current since this month but somehow the other lender figured out I missed two payments. 

Ok then put it on the market and sell it sounds like you have equity.. don't wait. wont get better

 

@Kimberly Walker You can still likely get a HM loan as it's equity based lending if you want to keep. If it doesn't make sense to go that route due to cash flow purposes or fear of not getting a conventional refinance within the next year or so, you may want to highly consider selling. What state are you in?