Editor / Producer · Asheville, NC · Member since 2015 · 31 posts · 0 votes
hey community,
a friend's father had a business that failed massively in the last 3 months. he just stopped paying the mortgage on his house. some of the business partners have liens against the property.
my understanding is that if this were to just follow its natural course, the bank will reclaim the property, and it will go to REO. as a side note, the dad's strategy was to spend his remaining emergency fund on a trailer and to move out into the country, basically so that when whoever comes after him for money, he can show he has nothing left in any of his accounts.
if it were just a matter of the mortgage payments, i would be very tempted to start paying them and pick up the house subject-to. the property is in one of the most desirable neighborhoods in all of asheville, and it's a nice home.
however, the liens present factors / challenges i just don't understand.
i don't plan on doing anything with this necessarily, but with this particular bit of inside knowledge about the property, it seemed worth sharing to see what experienced investors here thought of it.
Paradise, CA · Member since 2015 · 1k+ posts · 871 votes
11y
If it goes to sale, it might not go REO. It could go 3rd party so, let's clear that up.
Any lien junior to the foreclosing entity gets wiped out (With few specific exceptions)
You might be tempted to start paying them but, you risk acceleration of the note from the bank by doing so. You could get all fancy and stuff with the wrap-arounds and the subject to's and all of these other clever tricks to hide that you are taking over the home but contrary to popular belief, lenders aren't stupid, and i've seen too many accelerations for transfer without written lender approval to do so, to think otherwise.