How do I stall a foreclosure

Question

I found a property set for auction on the 5th of January but homeowner not yet willing to give up on the house. HO is hoping for approval on a VA mod.

I have an agreement from HO to allow me to call in a couple of weeks but will not allow me to walk through the house to estimate repairs or get the ball rolling with preliminary paperwork.

The problem is that I am not sure I have enough time to get the necessary paperwork and inspections/estimates done before the auction. 
 Spouse is in the clink with name still on title and not sure if I can get an agreement (QCD) from the incarcerated to relinquish his ownership interest in the house (they aren't talking). 
 I think the property has potential though I havenâ€™t seen the inside to estimate repairs.
 Payoff on loan is 55% of ARV

Is there a way to stall the auction as a homeowner short of BK or as a potetial buyer?

Sam M. · Answer

The notice of trustee sale reads:
to
secure an obligation owed to Western Security Bank, as Beneficiary, by Deed of Trust .......The
beneficial interest is currently held by CitiMortgage, Inc. successor in interest to Principal
Residential Mortgage Inc
??????????????

Sam M. · Answer

Thanks for the input. I might have caught a break though as citi (as I understand it) just anounced they will be holding off foreclosures over the holidays resuming again the 17th of January.
I think I might have the time to pull it off. Most of the homes in my area are overleveraged or need a lot of repair and not worth buying at auction for the minimum bid. 
 I don't know how competitive the bidding would be on this property as the payoff is close to what an investor would want to pay. There seems to be a fever here though and I saw a couple of people on the courthouse steps chomping at the bit for a property to buy. They had not even looked at the property and came with money. Silly people.

Steve Babiak · Answer

Oh, for stalling, the bank will sometimes do that in exchange for some money.  But I wouldn't put up any money without signed agreement of sale as a minimum; I'd also want to be certain that title is clear (or can be made clear without big payoffs other than the mortgage balance).  So you pretty much have to be under agreement anyway, so stalling is not really worth considering then.

There are some other stall tactics that are being used, but if you're trying to acquire the house, why bother?  Does a state or county gov't agency offer foreclosure counseling - sometimes that can be used to stall.  Signed arms-length agreement of sale with arrears paid will also stall the sale; oh, this is what I've been sort of suggesting already. :D

James Harkness · Answer

The news is correct, Citi will not foreclose or proceed with any foreclosures on first position mortgages that they own.  The key is that they have to own the note, not just service it.  My understanding is that they own about 20% of the the notes that they service.

Steve Babiak · Answer

That VA loan mod probably will have to be signed by the veteran who is owner; if that happens to be the guy locked up, it will take time for that to complete too.

You will need to explain to the seller that they will have to move quickly before the sale date to avoid the sale taking the property from them.  They are now in "special servicing" with the lender, and it can take some time to get through to the servicer to get the payoff in writing; it took 3 days for me to get that number in one case.  Title company will need certain amount of time to conduct their title search; they might want 5 days or more for that.  You will need some time for inspections.  Add that up and explain it to them.  And for any of that to even happen, they will have to give you some signed papers.

As for closing with the guy locked up, you might want to consider whether a traveling notary can accompany somebody to have closing papers signed by him behind bars.  Then you are only needing to close with the other half, and can get a warranty deed of some sort rather than a quit claim.