Finding Delinquent owner, then acquiring note from bank?

Question

Hi there, wanted to know the process and if any of you have delt with this (I'm in Ohio for reference).

I've located a property, the owner is delequent on his payments. I have confirmed this with the bank, the bank has already re-keyed the property and winterized it as well.

The bank is willing to sell the mortgage or do whatever is needed to get rid of the property. I've talked with the clerk of courts of the area the property is in ,and it will go to a sheriff's sale here soon.

I'm trying to see if the property could be purchased prior to the sale.

COULD the property owner sign off on the property and then the possibility of going to the bank, and then go to the bank and purchase the non-performing note?

Thanks!

Brandon Schlichter · Answer

Do any of you have forms you use to negotiate within a situation like this?

The sellers are now willing to sign off (Via the sellers' attourney).

I've already contacted the bank , so we can work with them on some sort of resolution.

I'm wanting to get a signed promise from the sellers that they will perform something along the lines of a deed-in-lieu of foreclosure once the buyer becomes the mortgage holder.

Jon Holdman · Answer

Hey Rick,
As far as I know, there's no specific form you use to make the offer.  I've only been involved in one deal like that, and it was from a distance.  The guy who had negotiated with the bank didn't end up using us.  I would assume you would negotiate with the same department.  I've heard Donna Bauer speak about note buying.  I believe she has a course.  No direct experience with her or her approach.
Jon

N/A N/A · Answer

Wheatie,

Could you describe in what form you make an offer for a bank note. What department do you contact to buy the note? Loss Mitigation? Foreclosure? REO? Collections? Who sells a course on how to do this?

Thanks
Rick

Jon Holdman · Answer

I think you're referring to a deed in lieu of foreclosure.  Yes, indeed, you could do a deal like this with the owner once you have the note.

Jon

Eric Foster · Answer

Get the owner to sign the deed over to you!

It gets the seller out of the mind-set of thinking he still owns it... and gives you more control over whats going on now that you are the owner.

Then get the bank to accept less for the note and buy it.

Also, if you have the deed, you can reinstate the loan if need be and kill the foreclosure.

PS I have heard that some states are cracking down on this... so as with anything, make sure it is ok to do in your state.

Go get em.

Brandon Schlichter · Answer

Couldn't the current property owner sign off on a quit-claim deed once you own it (This is, pending the property owner willing to do so once you've become the new bank).

Jon Holdman · Answer

You have to avenues of attack.

One is to get in contact with the owner and get them to sell you the property. This may involve getting the back to accept a short sale, and get paid less than they owe.  Sounds like they may be willing.  But, you have to do this through the owner.  Since they still own it, they are the only ones who can sell it.

You can also by the note from the bank.  You would probably want a discount, maybe significant, over the face value.  Then, you complete the foreclosure.  Or, work out a deal with the owner.  Once you own the note, you're the bank, and you have the same options as the bank does now. The owner would not be involved with the purchase of the note, but you would have to deal with them after you became the bank.

Jon