Can lender force me into foreclosure if I can't repay at maturity

CA · Member since 2016 · 1k+ posts · 1k+ votes

I have a rental property that has a market value of $1.5M and $300K mortgage on it... The 10 year ARM is coming to maturity around 7/17, but I can't find a lender that still does that type of loan anymore (TIC for rental)..

What is going to happen if I can't make the balloon payment at 7/17? I reached out to the bank (Stanford Credit Union) and they told me they could extend "a few months" but that does not really solve the problem...

They dont want to renewal the mortgage because they are getting out of the business themselves... Any one has a similar experience before?

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

Diane you need a commercial banker who understands your situation. This is a pretty foreign concept out side of Silicon valley... are you sure your loans are not joint and several.. ??

And how much other debt is in the TIC ? whats the total debt load ?

I seriously doubt though the bank wants to own a % interest in a property.. they can't do much with that....

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Diane G.
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CA · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Jay Hinrichs
Jay - I get what you are saying... One way or another, this will come to a resolution... There are a couple of options for me on the table, such as unloading another property, but I am trying to figure out the cheapest + easiest way, and for now I see working with SCU being the easiest, so I will try that one first... But will see....
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
Diane keep us posted this is quite interesting .... from an old bay area kid.. I like to keep my fingers on the pulse there !!
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Lily Quan
San Jose, CA · Member since 2016 · 36 posts · 7 votes
9y
@Diane G. sounds like you are ready for worst case as you mentioned unloading another property to pay the $310K. I do know for a fact, a private lender would have programs to cross collateralize other properties to get this done with out having you "unload". Is this other property you mentioned in CA? The program I know doesn't disrupt your current loan in place. Instead, it will take a 2nd position lien. You could use this line over and over again without having to pay points over and over. Something to consider....
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Diane G.
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CA · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Lily Quan
That is a SFH in Union City... Below is a link to the area... Value of $750K ish with mortgage of $280K... Do you know any lender that would be interested in it?
https://www.google.com/maps/@37.5946374,-122.0022224,3a,75y,343.39h,88.96t/data=!3m6!1e1!3m4!1s6zD-TrGONQXQBN5jGoB2Ug!2e0!7i13312!8i6656
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Lily Quan
San Jose, CA · Member since 2016 · 36 posts · 7 votes
9y
@Jay Hinrichs. Your disastrous year seems awful, hope you have a chance to reset from that. I do agree with what you are stating. When big banks decide specific aspect of their portfolio needs to switch gear, they are not thinking about how it personally affects each individual. They don't have time for empathy, the smaller lenders may @Diane G.While you are emphasizing that you have never been late, in their mind, you are not suppose to be late. I applaud you for being an optimist though.
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Lily Quan
San Jose, CA · Member since 2016 · 36 posts · 7 votes
9y
@Diane G. Yes, this is a good piece of property and we know the area well. Is there is a 2nd lien on this or only a 1st lien? We would take a 2nd position but not a 3rd. The ratio is well balanced for our portfolio. We would use this as collateral. This is the niche that my private lender specializes in.
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Diane G.
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CA · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Lily Quan
No 2nd, just first mortgage... It is a SFH, just under 2000 sq ft, with 4bed/2bath....
If you can find someone seriously interested here, can you email me? Thanks
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Lily Quan
San Jose, CA · Member since 2016 · 36 posts · 7 votes
9y
@Diane G.I sent you a personal email. thank you. We can help you!
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Diane G.
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CA · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Lily Quan
Thanks Lily... Just checked my inbox and spam, nothing... I will wait a little longer maybe things are being slow...but thanks a ton....
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Lily Quan
San Jose, CA · Member since 2016 · 36 posts · 7 votes
9y
@Diane G.I tried to send you an inbox mail but it was deleted repeatedly. Not sure why. Please get a hold of me via my signature. Would love to discuss a solution for this way before July. Happy New Year!
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Diane G.
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CA · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Lily Quan
Hi Lily - i have been wondering what happened to your emails... Lol... let me ping you now....
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Diane G.
OP
CA · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Lily Quan
Lily - i tried your cell listed on your profile and it is "not in service"???? So i sent you my contact info to your linkedin account... please check... Thanks
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Lily Quan
San Jose, CA · Member since 2016 · 36 posts · 7 votes
9y
@Diane G. the number on my signature is not my my cell. It is my office line. Please email me and we can get in touch. thanks.
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Diane G.
OP
CA · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Jay Hinrichs @Lily Quan @Jessica Zolotorofe @Amit M.
Guys - thank you for all your inputs, I figure I give an update.... So my refi got funded and recorded last week... In the end, the same bank that held my original TIC loan gave me another loan to pay off the TIC loan.... 15 year fixed, 30 year amort, at 4%.... BUT I had to pay 2 points up front and about $2000 in closing cost......TIC loan was at 5.25%.... I figure, all in all, it is a break even....
It was a nightmare for me for a few month, and I am just happy to be able to put that behind me now.... Thank you....
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
congrats. Did not see that outcome
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Diane DeVita-Seneca
Real Estate Agent · Atco, NJ · Member since 2016 · 6 posts · 1 vote
9y
Maybe you could find an investor to give you a private loan, or give some equity in the property in exchange for paying off the balloon payment. A good majority of properties that went through foreclosure after the market crash were due to those loans with balloon payments, as most people believed they could refinance the loan out, only to find they didn't have the equity to do so. I'm not sure why you can't refinance the loan since you have so much equity, there's got to be a bank out there who would do the loan.
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