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Negotiating the bank down?...
Here is a mortgage statement from a homeowner that is being foreclosed on. He wants to sell to me. Can I negotiate some of the interest and late fees down from the bank? And what is the best way to approach that conversation? Thank you for any help!
.
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If anyone knows the best way to get the bank to postpone the auction that is also helpful. But even if I can't close until after the auction they are still within that 6 month period so my purchase would take precedence correct?
#1 Foreclosures Contributor
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#1 Foreclosures Contributor
- Real Estate Professional
- West Palm Beach, FL
No, the bank will not negotiate unless you go thru a short sale, which wouldn’t be approved if there is equity. What 6 month period, redemption period? Maybe, if you’re paying cash and you understand the requirements/process.
#2 General Real Estate Investing Contributor
Have the homeowner talk to the bank and ask if there is a way he can sell his property to pay them back.
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
Quote from @Ben Boru:
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
The lender will recover all their interest and expenses at the auction if the property sells. (There is no reason for them to negotiate.) Otherwise they will get possession of the property if it doesn’t sell to a third party.
I would think the only way to get the property is to pay off all expenses owed before the auction… but only the owner of the property could do that I would think. Maybe make a side agreement to front that money and cut him in on some cash. Would definitely use a lawyer to draw something up. I doubt you will get far with calling the lender. It is likely they won’t even talk to you due to confidentiality reasons.
Best of luck!
Randy
I don't know the MI foreclosure process just CT and FL, but if its at all similar, if you have the property under contract and workout package submitted to the lender, you may be able to get them to postpone the date.
Get the owner under contract, subject to short sale approval. Then what you need to do is get the owner to give you third party authorization on the account and submit it. Then call the lenders loss mit division (may be called something similar - they will usually automatically route you there based on the accounts default status). DO NOT TALK TO COLLECTIONS AS THEY WILL STEER YOU WRONG. Make sure its loss mit. Tell them you need to do a short sale. They will email you a package or tell you what docs to submit.
Get these docs in ASAP and start following up. Good chance they move the date to give you time to work it out. FYI - you will likely need a Realtor as there is a 99% chance the lender will want to see the property was listed.
Sounds like your first short. Start there now. Then I highly recommend you get help from someone who has done short sales, or at the very least ask lots and lots of questions here as you will need help. A few weeks is not a long time, but its possible. I've done it multiple times. You just have to be on top of it and know what you are doing. You won't get the sale closed within a few weeks as short sales take a few months, but if he's qualified, and you stay on top of things, you will likely get enough extensions to see this thing through. Good luck!
Quote from @Ben Boru:A couple of weeks is more than enough time to get the payoff and/or reinstatement, get a title policy and close the deal before the auction.
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
And as others have stated, NO the bank will not negotiate late penalties/interest.
Quote from @Marty Boardman:Deed is still in his dads name. Probate attorney I used for my mother is calling me at 3pm. 😬 Homeowner wasn't cooperative but now is finally fully on board.
Quote from @Ben Boru:A couple of weeks is more than enough time to get the payoff and/or reinstatement, get a title policy and close the deal before the auction.
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
And as others have stated, NO the bank will not negotiate late penalties/interest.
Quote from @Ben Boru:
Quote from @Marty Boardman:Deed is still in his dads name. Probate attorney I used for my mother is calling me at 3pm. 😬 Homeowner wasn't cooperative but now is finally fully on board.
Quote from @Ben Boru:A couple of weeks is more than enough time to get the payoff and/or reinstatement, get a title policy and close the deal before the auction.
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
And as others have stated, NO the bank will not negotiate late penalties/interest.
That’s not good, You are not going to be able to do ANYTHING with that until it goes through probate. The family technically doesn’t own the property now… the estate does - which has to be administered through the courts. The family, through the lawyer, could possibly catch up the overdue payments to stave off the foreclosure, but otherwise probate is likely going to come first before anything else.
Randy
Quote from @Randall Alan:
Quote from @Ben Boru:
Quote from @Marty Boardman:Deed is still in his dads name. Probate attorney I used for my mother is calling me at 3pm. 😬 Homeowner wasn't cooperative but now is finally fully on board.
Quote from @Ben Boru:A couple of weeks is more than enough time to get the payoff and/or reinstatement, get a title policy and close the deal before the auction.
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
And as others have stated, NO the bank will not negotiate late penalties/interest.That’s not good, You are not going to be able to do ANYTHING with that until it goes through probate. The family technically doesn’t own the property now… the estate does - which has to be administered through the courts. The family, through the lawyer, could possibly catch up the overdue payments to stave off the foreclosure, but otherwise probate is likely going to come first before anything else.
Randy
I have a probate attorney calling me in an hour. I'm thinking the executor, the son, can sign a quit deed and get it into his name. We will see. Dad has been dead for 10 years.
Quote from @Ben Boru:
Quote from @Randall Alan:
Quote from @Ben Boru:
Quote from @Marty Boardman:Deed is still in his dads name. Probate attorney I used for my mother is calling me at 3pm. 😬 Homeowner wasn't cooperative but now is finally fully on board.
Quote from @Ben Boru:A couple of weeks is more than enough time to get the payoff and/or reinstatement, get a title policy and close the deal before the auction.
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
And as others have stated, NO the bank will not negotiate late penalties/interest.That’s not good, You are not going to be able to do ANYTHING with that until it goes through probate. The family technically doesn’t own the property now… the estate does - which has to be administered through the courts. The family, through the lawyer, could possibly catch up the overdue payments to stave off the foreclosure, but otherwise probate is likely going to come first before anything else.
Randy
I have a probate attorney calling me in an hour. I'm thinking the executor, the son, can sign a quit deed and get it into his name. We will see. Dad has been dead for 10 years.
If the estate has been probated, yes. If the estate hasn't been through probate the son has no rights to the property. You have to initiate probate and get letters of administration to be able to act on the affairs of the decedent. "Executor" gets thrown around loosely. It will come down to whether the estate was ACTUALLY probated. If not, you are going to be stuck. Given the value of any property these days, it will almost certainly have to be formally probated. Takes thousands of dollars, and months of time. Probably a minimum of 3-6 months. The last one I was involved with took 2 years... it was a big estate. But it takes 2 months where I live just to get on the docket of a probate judge.
Wish you the best!
Randy
Quote from @Randall Alan:How could it not be probated for 10 years? Wouldn't the state automatically do that? Guess we will see
Quote from @Ben Boru:
Quote from @Randall Alan:
Quote from @Ben Boru:
Quote from @Marty Boardman:Deed is still in his dads name. Probate attorney I used for my mother is calling me at 3pm. 😬 Homeowner wasn't cooperative but now is finally fully on board.
Quote from @Ben Boru:A couple of weeks is more than enough time to get the payoff and/or reinstatement, get a title policy and close the deal before the auction.
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
And as others have stated, NO the bank will not negotiate late penalties/interest.That’s not good, You are not going to be able to do ANYTHING with that until it goes through probate. The family technically doesn’t own the property now… the estate does - which has to be administered through the courts. The family, through the lawyer, could possibly catch up the overdue payments to stave off the foreclosure, but otherwise probate is likely going to come first before anything else.
Randy
I have a probate attorney calling me in an hour. I'm thinking the executor, the son, can sign a quit deed and get it into his name. We will see. Dad has been dead for 10 years.
If the estate has been probated, yes. If the estate hasn't been through probate the son has no rights to the property. You have to initiate probate and get letters of administration to be able to act on the affairs of the decedent. "Executor" gets thrown around loosely. It will come down to whether the estate was ACTUALLY probated. If not, you are going to be stuck. Given the value of any property these days, it will almost certainly have to be formally probated. Takes thousands of dollars, and months of time. Probably a minimum of 3-6 months. The last one I was involved with took 2 years... it was a big estate. But it takes 2 months where I live just to get on the docket of a probate judge.
Wish you the best!
Randy
Quote from @Marty Boardman:
Quote from @Ben Boru:A couple of weeks is more than enough time to get the payoff and/or reinstatement, get a title policy and close the deal before the auction.
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
And as others have stated, NO the bank will not negotiate late penalties/interest.
@Marty Boardman I've been working short sales for 15 years. Banks ABSOLUTELY 100% negotiate mortgage debts when property debts exceed value. That's the whole point of a short sale.
The OP indicated this was short sale territory. So unless someone wants to clear all these debts as they are and pay more than the property is worth, paying off the loan is pointless. Sounds like the OP is unwilling to do that anyway
Certainly if the paying off all the debts with no discount is an option, they can easily do that and close anytime, however that is not the case per the OP ( Or the impression I got anyway).
The foreclosure is the first problem to solve. Probate can also be handled after. But unless a legal owner can sign a P&S ASAP, this whole deal is going to die. However, even without the P&S, it is worthwhile to get an authorization to talk to the lender to try to buy time with a workout.
Quote from @Minna Reid:
Quote from @Marty Boardman:
Quote from @Ben Boru:A couple of weeks is more than enough time to get the payoff and/or reinstatement, get a title policy and close the deal before the auction.
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
And as others have stated, NO the bank will not negotiate late penalties/interest.@Marty Boardman I've been working short sales for 15 years. Banks ABSOLUTELY 100% negotiate mortgage debts when property debts exceed value. That's the whole point of a short sale.
The OP indicated this was short sale territory. So unless someone wants to clear all these debts as they are and pay more than the property is worth, paying off the loan is pointless. Sounds like the OP is unwilling to do that anyway
Certainly if the paying off all the debts with no discount is an option, they can easily do that and close anytime, however that is not the case per the OP ( Or the impression I got anyway).
The foreclosure is the first problem to solve. Probate can also be handled after. But unless a legal owner can sign a P&S ASAP, this whole deal is going to die. However, even without the P&S, it is worthwhile to get an authorization to talk to the lender to try to buy time with a workout.
It would for sure be a short sale if my market wasn't swimming with sharks. But it probably isn't a short sale unfortunately. And houses are so scarce I should probably take it how I can get it and clear 20k if I'm tactful
Some people in this this thread are incorrect about probate. But I appreciate everyone's input GREATLY
Quote from @Ben Boru:
Quote from @Randall Alan:How could it not be probated for 10 years? Wouldn't the state automatically do that? Guess we will see
Quote from @Ben Boru:
Quote from @Randall Alan:
Quote from @Ben Boru:
Quote from @Marty Boardman:Deed is still in his dads name. Probate attorney I used for my mother is calling me at 3pm. 😬 Homeowner wasn't cooperative but now is finally fully on board.
Quote from @Ben Boru:A couple of weeks is more than enough time to get the payoff and/or reinstatement, get a title policy and close the deal before the auction.
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
And as others have stated, NO the bank will not negotiate late penalties/interest.That’s not good, You are not going to be able to do ANYTHING with that until it goes through probate. The family technically doesn’t own the property now… the estate does - which has to be administered through the courts. The family, through the lawyer, could possibly catch up the overdue payments to stave off the foreclosure, but otherwise probate is likely going to come first before anything else.
Randy
I have a probate attorney calling me in an hour. I'm thinking the executor, the son, can sign a quit deed and get it into his name. We will see. Dad has been dead for 10 years.
If the estate has been probated, yes. If the estate hasn't been through probate the son has no rights to the property. You have to initiate probate and get letters of administration to be able to act on the affairs of the decedent. "Executor" gets thrown around loosely. It will come down to whether the estate was ACTUALLY probated. If not, you are going to be stuck. Given the value of any property these days, it will almost certainly have to be formally probated. Takes thousands of dollars, and months of time. Probably a minimum of 3-6 months. The last one I was involved with took 2 years... it was a big estate. But it takes 2 months where I live just to get on the docket of a probate judge.
Wish you the best!
Randy
Depends on the state, but no, not necessarily. I personally know someone here in TN that had an almost identical situation to you. Mother had a note on the property and died, two older adult kids. One of them lived in the house with the mother and just kept paying the mortgage, and the other one (brother) didn't object. Fast forward a few years and the bank found out the mother was dead and called the loan. Daughter and Son had no legal rights to the property until it was probated, so they couldn't even get another loan. They got an attorney, who then worked with the bank and the local courts to get it fast-track probated and a year later after the brother signed a quit-claim for his portion of the house the sister was able to get a loan on the property to pay off the bank and fees and attorney fees. It cost them all a bundle of money. I know the daughter as she was my drummer's wife at the time.
Quote from @Minna Reid:
Quote from @Marty Boardman:
Quote from @Ben Boru:A couple of weeks is more than enough time to get the payoff and/or reinstatement, get a title policy and close the deal before the auction.
Quote from @Minna Reid:
Foreclosure process is very state specific. What state is it?
What's the home worth?
No, they wont eliminate their fees and interest, but if the homes debts exceed its value you may pursue a short sale. If its in process they may move that fc date for you. When is the fc date?
Michigan. Auction in a couple weeks. It's close to short sale territory. Homeowner is ready to work I'm going to try to have them push that date back tomorrow.
And as others have stated, NO the bank will not negotiate late penalties/interest.@Marty Boardman I've been working short sales for 15 years. Banks ABSOLUTELY 100% negotiate mortgage debts when property debts exceed value. That's the whole point of a short sale.
The OP indicated this was short sale territory. So unless someone wants to clear all these debts as they are and pay more than the property is worth, paying off the loan is pointless. Sounds like the OP is unwilling to do that anyway
Certainly if the paying off all the debts with no discount is an option, they can easily do that and close anytime, however that is not the case per the OP ( Or the impression I got anyway).
The foreclosure is the first problem to solve. Probate can also be handled after. But unless a legal owner can sign a P&S ASAP, this whole deal is going to die. However, even without the P&S, it is worthwhile to get an authorization to talk to the lender to try to buy time with a workout.
Yes on a short sale, I know he can do that. But from what I read I thought he was trying to buy it before the auction took place. If this is the case then the bank won't negotiate. From what I'm seeing at auction sales where I buy in Wisconsin, Ohio, Indiana and South Carolina banks often get above what is owed to them.
Also Ben I saw you had to run this through probate. If that's the case then you probably can't get it closed before the auction. But, if the bank is aware you're working through it with the estate they may give you more time. Good luck!