Hey Group,

I am in Dallas County Texas and need a little help setting up Subject to deals. The main issue I'm having is getting an extension or stopping the foreclosure process long enough to close the deal. Any help would be appreciated. 

Thanks

David Serrano

if you are working with sellers in forclosure do this

get them to call the lender to ask for an extention until they catch up.  Its so simple, but it works, not all the time, but some time.   Most lenders do not want to foreclose because it expensive.   Get the seller to ask for a defferment.   

Even a short sale does not stop the foreclosure.  But a deferrment can stall it.   

You should join up with a "stop foreclosure" service.   or better yet, team up with a local real estate attorney.   You can send people his way.  He will be able to delay the foreclosure process for a fee.    You may have to get creative and work your subject to fees into working with the attorney but in the long run you will bring each other business.

Wow, i just have myself an idea.   :)   

have a good 1

Thanks Gerald that was some good info. Will try it.

Texas is a non-judicial foreclosure state.  The Borrower will be issued a time to cure the default and the amounts owed to cure said default.  Stalling FC outside of following the delivered remedies from the Mortgagee will end up mostly in vain.  

A Borrower can contact their Mortgagee or Servicer and ask for relief.  A loss mitigation process might add some time to the process.  This will depend on whether or not the Borrower has already done this either through their own actions (asking for relief) or through the actions of the Mortgagee or Servicer (contacting the Borrow with alternatives to foreclosure).

A FC attorney would have to bring forth concepts to stall or stop the foreclosure.  While not impossible or relatively uncommon it is not all that common due to the nature of the security instrument and the ordinary course of business most Mortgagee and Servicers conduct in the state.  Essentially some of the core ideas would be to show the Borrower did not get served properly or was not afforded the 20 days to cure the default.  Further, they could look into standing for the Mortgagee, whether they are legally able to enforce the remedy.  This has been diminished as of late by some higher court rulings regarding note possession.  The last common idea would be illustrating that some form of dual tracking is present, where the Borrower sought relief was engaged by the Mortgagee or Servicer and the FC continued in process.  Again, not overly uncommon, but not all that common either.  

Texas and Georgia are not the same.  Process and time and expenses are not the same.  Apples and oranges there.  Texas is one of the quickest FC states in the US.  As such, expenses are not all that high.  

Reinstatement is eligible through the 20 day period from notice.  If that time has elapsed, the Mortgagee can demand payment in full for the entire amounts due.  If the time is within that notice, then the interest arrears and advances can be paid to reinstate the loan.  The quick time makes it difficult for an investor to step in and cure such things.  

I am curious from the OP. These deals that you are trying to get done, I would presume most have no equity and by the mention you make of Sub2, you plan to put a new Borrower into the property, likely with lesser credit and paying a higher interest rate, if not purchasing the property for more than it is worth....

Who do these deals benefit?  

Well nobody mentioned filing bankruptcy yet ...

Originally posted by @Steve Babiak:

Well nobody mentioned filing bankruptcy yet ...

While a BK would stand to stay the foreclosure action, I think it is a limited benefit of any investor trying to do a Sub2. The property will have some affinity to the BK plan. I don't see a Trustee allowing a Sub2 sale as an option. If the Borrower tells the BK attorney they don't want the property, he will work to make a true sale. Perhaps, that would work for the investor(?) If the Borrower re-affirms the debt, I can't imagine a Trustee allowing the asset to be sold and the total debt not be paid in full. Such things would throw the Borrower's liability to asset ratio out of wack.

In the event the Trustee is kept in the dark, the transfer would be immediate cause for the Mortgagee to file for relief of stay and foreclose.  In that idea, I would say a property in BK is looked at more often by the Mortgagee increasing the chances of it being revealed.  

Let's not forget, contempt of court and bankruptcy fraud come into play rather quickly.  

Originally posted by @Dion DePaoli:

Texas is a non-judicial foreclosure state.  The Borrower will be issued a time to cure the default and the amounts owed to cure said default.  Stalling FC outside of following the delivered remedies from the Mortgagee will end up mostly in vain.  

A Borrower can contact their Mortgagee or Servicer and ask for relief.  A loss mitigation process might add some time to the process.  This will depend on whether or not the Borrower has already done this either through their own actions (asking for relief) or through the actions of the Mortgagee or Servicer (contacting the Borrow with alternatives to foreclosure).

A FC attorney would have to bring forth concepts to stall or stop the foreclosure.  While not impossible or relatively uncommon it is not all that common due to the nature of the security instrument and the ordinary course of business most Mortgagee and Servicers conduct in the state.  Essentially some of the core ideas would be to show the Borrower did not get served properly or was not afforded the 20 days to cure the default.  Further, they could look into standing for the Mortgagee, whether they are legally able to enforce the remedy.  This has been diminished as of late by some higher court rulings regarding note possession.  The last common idea would be illustrating that some form of dual tracking is present, where the Borrower sought relief was engaged by the Mortgagee or Servicer and the FC continued in process.  Again, not overly uncommon, but not all that common either.  

Texas and Georgia are not the same.  Process and time and expenses are not the same.  Apples and oranges there.  Texas is one of the quickest FC states in the US.  As such, expenses are not all that high.  

Reinstatement is eligible through the 20 day period from notice.  If that time has elapsed, the Mortgagee can demand payment in full for the entire amounts due.  If the time is within that notice, then the interest arrears and advances can be paid to reinstate the loan.  The quick time makes it difficult for an investor to step in and cure such things.  

I am curious from the OP. These deals that you are trying to get done, I would presume most have no equity and by the mention you make of Sub2, you plan to put a new Borrower into the property, likely with lesser credit and paying a higher interest rate, if not purchasing the property for more than it is worth....

Who do these deals benefit?  

 They idea is to assign the contract over to other investors that are more interested in what is left on the term of the mortgage and the monthly cash flow as oppose to the equity. What they would do is pay to reinstate the loan and put a renter in there. 

@David Serrano 

Again, the general assumption is there is no equity in the deal.  If there was, a true sale would be the first option the Borrower would take and the Mortgagee or Servicer would encourage.  

So then, through the assignment, what is the investor buying?  A risk of loosing their investment from a foreclosure on the property while trying to recoup their investment through monthly rental payments.  That is barring any repairs of any size needing to be done to make the property rent ready.  It is difficult for me to imagine that rental income can be large enough to make any impact in capital recovery.

There are tons of folks trying to sell the idea of what you are trying to do.  I can't imagine that there is any supply above zero of prudent investors investing in that kind of deal.  As such, you may inherit liabilities from investors who are attracted to such deals with ill intents.  

If I am missing something here, feel free to correct me or if there is an investor out there taking these types of risk, please feel free to chime in.  Like I said, I see lots of folks posting the sales side, I rarely, well never, have ran into someone seeking these deals.