ok, so i see an empty house in my neighborhood. the city has put up a sign that's abondoned.
i did a search on the country website and found the owner. GMAC holds the mortgage, it's around $165k. the houses, if updated, is worth around 120k. so he was under water and just left the house.
what are the steps? no point of contacting him. although he is on facebook posted a picture infront of the house (lol).
if i contact GMAC, will they even care to talk to me or just foreclose on him? then list it?
if GMAC does talk to me, i doubt they will give it to me for 50 since the houses are popping on the MLS at around 110-120 at the moment.
what are my options? never went after an empty house that was not REO before, so any suggestions would be appreciated.
@George P. if you can contact the owner maybe he would do a deed to you for $20 bucks and you could do a short sale or try buying out out his note. if you already hold a deed to the property it might simplify things a lot, but maybe not as there are loan forgiveness issues. You also try buying the Note from the bank it should be much cheaper if it is non performing and you could save them doing a foreclosure. DO NOT do this if you know nothing about foreclosures they can be long and costly in some states. You might ask @Bill Gulley or others about this strategy, it is beyond my area of knowledge.
Make sure and check for any other liens on the property and factor that into your acquisition cost. If you do get the note you will need to either get a deed or foreclose. Be careful if he just deeds it over to you because any secondary liens transfer. Only a foreclosure will clear those from the title. Taxes go with the property no mater what and will have to be paid.
Speaking of taxes, call the county and make sure it is not going to tax sale, and that no past taxes have been sold off (they don't always show on the county records once they are sold).
George, with GMAC in this, this situation will be a short sale, you do need to track down the owner.
Since the melt down with banks given more favorable write down provisions with short sales, there is less incentive to sell a note and write off the loan loss compared to the short sale path.
In cases where there is an offer to sell a note that is about weeding out problem loans. This loan is non-performing and it will be viewed as to costs of foreclosure, holding costs and sale. That may be a better solution than taking it to foreclosure, in this case I don't see GMAC eating 45K exceeding such alternatives and perhaps having some things done, protecting the collateral, and holding it for sale.
The other factor is the borrower information, likelihood of obtaining a deficiency judgment or will they be headed to bankruptcy?
The better note purchases are in connection with a work out with a lender or in slow performing loans, a lender may be willing to take a bit of a hit as it costs them in term of such loans effecting reserve requirements.
You will never be able to call an insured lender and obtain loan information of an active loan that isn't offered for sale. You need the borrower's consent. A request to provide loan information is made by the borrower requesting that details are provided to you.
It's possible too to make an offer to buy the note early on in the foreclosure process, just prior to notice as the borrower should have a clue or shortly after. The sale is requested by the borrower as a cure for foreclosure, the lender may allow a discount but they may require a full payoff. The advantage is keeping a property off the steps of the courthouse when there is equity and other buyers may be there. A full offer is the same as a payoff and you'll need to consider any advantages as opposed to just refinancing the borrower, but if you're not a lender buying the note is an option. I've used letters of intent to purchase with a copy to the regional regulator simply drawing attention to the fact that the lender needs to sell the note rather than destroy the credit of the borrower. An incentive to pay attention and a negotiation point. :)
i am sorry to say that all this great advice just files over my head. I hear and read the terms, but know nothing about them. I can contact him and he might or might not give me concent, but I wonder if its still worth to continue if I know nothing about notes, deeds, etc. Any blogs where they talk of the SPECIFICS I can recommend?
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