Homeowner · Riverview, MI · Member since 2009 · 7 posts · 0 votes
I am currently going through the foreclosure process. I am at the very begining and was wondering if it is possible to let it go to auction and wait until it doesn't sell then offer the bank more like what it is worth. I am currently 75000 upside down and the best the bank is willing to do is give me a 6 month 5.25 intrest rate after that it adjustes back to 14.9%.
Will, I'd agree that buying your own short sale is going to run into trouble. But if the property becomes a REO, and you end up buying it after the fact, what grounds would the bank have for either refusing to sell it to you, or coming after you if you did buy it.
If "currently 75000 upside down" means you owe $150K and its worth $75K, buying it back at $75K would make a big difference in payments. If the OP means they owe $500K and its now worth $425K, then I agree it won't make much difference. All that notwithstanding the fact you're not going to get a new mortgage just after going through a foreclosure.
I thought this was a great story, and shows how the right people, Attorney, can give you a good ending in this messed up banking world.
The home owner was behind and close to loosing their house. Hired my attorney to try to do a loan mod. The bank was not being very cooperative in the process. The attorney changed gears and started negotiating for the non performing note on the house. Was successful in buying the note at penny's on the dollar and worked out cheaper than a loan mod, or, the going short sales price in the area. That is the first time I heard of a home owner buying their own non performing note. Turning lemons into lemon aid!
Of course I must add, this was performed but professionals, do not try this at home or you might cause great home ownership harm. And proves how scr@#$ up the system is right now.
I thought this was a great story, and shows how the right people, Attorney, can give you a good ending in this messed up banking world.
The home owner was behind and close to loosing their house. Hired my attorney to try to do a loan mod. The bank was not being very cooperative in the process. The attorney changed gears and started negotiating for the non performing note on the house. Was successful in buying the note at penny's on the dollar and worked out cheaper than a loan mod, or, the going short sales price in the area. That is the first time I heard of a home owner buying their own non performing note. Turning lemons into lemon aid!
Of course I must add, this was performed but professionals, do not try this at home or you might cause great home ownership harm. And proves how scr@#$ up the system is right now.
Okay, so how could the homeowner afford to buy the note but could not afford to make the monthly payments?
I did not ask detailed questions into the case. But if a homeowner still has the same job, and making a decent living, his mortgage doubles, values tank and he can not refinance, which is what all the mortgage brokers said they could do when they put the home owners into the pic-a-payment loans. The home owner is banking the payments during the foreclosure process. "If the bank is not cooperating, and your payment doubles, why would you turn in partial payments, and the bank by law cannot accept payments during the foreclosure process. At the end of 6 months to a year the home owner has a decent amount of reserves. Those reserves is what he used to buy the house/note. Once again I say, the banking industry is messed up.
I'm not trying to anal or a jerk but this is not making sense. I know you said you didn't ask about the details and that may hold the key to understanding.
But, from the information you have given here something just does not add up.
Did the lender know the defaulting borrower was buying the note?
If so:
Was this a federally chartered lender? If so, how did the lender get this by the regulators? If not, how did they justify it to the investors?
If not:
How did the attorney hide this from the lender and it not be fraud?
Since you didn't have the details, you may not know the answers to these. And I am not saying it didn't happen. However, lots of questions come to my mind from your post.
You are right. I heard the story from my attorney, and you learn not to ask the ins and outs of every case , when it is costing you $350 an hour for his time. What does make sense right now? The banks taking 400B, and putting it in their vaults and not helping the home owners. If anyone can explain anything going on right now, I am all ears, because new rules are being written every day.
I do not see you as a jerk or anal at all. Just a logical thinking person trying to make sense in a senseless world.
"I am currently 75000 upside down and the best the bank is willing to do is give me a 6 month 5.25 intrest rate after that it adjustes back to 14.9%."
How about this for making sense. A quote from the original post. And the bank might have even said, you have to get current first before we can work with you. I have heard that one also.
I thought this was a great story, and shows how the right people, Attorney, can give you a good ending in this messed up banking world.
The home owner was behind and close to loosing their house. Hired my attorney to try to do a loan mod. The bank was not being very cooperative in the process. The attorney changed gears and started negotiating for the non performing note on the house. Was successful in buying the note at penny's on the dollar and worked out cheaper than a loan mod, or, the going short sales price in the area. That is the first time I heard of a home owner buying their own non performing note. Turning lemons into lemon aid!
Of course I must add, this was performed but professionals, do not try this at home or you might cause great home ownership harm. And proves how scr@#$ up the system is right now.
i have OFTEN wondered if it was possible to buy your own note at a discount. I have NO idea how to even a buy a note...can you buy your own note if you are paying on time? would it be discounted?
I can always trust you to get us back on tract Jon.
My point is anything is possible right now, but an attorney will have more power to talk on your behalf.
I have spoken with my attorney and my lender on this very subject and was informed it is not legally possible.
I was told a story in which an investor purchased a short sale property from Countrywide and his end buyer used financing through Countrywide. Countrywide, in essence, bought their own short sale and ended up filing a lawsuit. I do not have the details either and as far as I am concerned, Countrywide was willing to accept the short on one end and willing to finance someone on another, so has no ground to stand on, but that is only my opinion as Countrywide is part of the group of companies running our country, i.e. the banks.
This of course is not the same as buying your own note, but I did ask as I have an investor who is upside down on his property with a 1st and 2nd mortgage and he wanted to negotiate a short pay on the 2nd with his own cash. Attorney informed me this was not possible.
Just the same, banks look very closely at short sale transactions as they want to make sure that the homeowner is not benefiting financially from the transaction. Several people have tried to have their family members buy the short sale and then deed it back to them with a lower payment. It is fraud to the banks and sounds like fraud to me, but I am no attorney.
Perhaps our BP attorneys can chime in.
Will, I'd agree that buying your own short sale is going to run into trouble. But if the property becomes a REO, and you end up buying it after the fact, what grounds would the bank have for either refusing to sell it to you, or coming after you if you did buy it.
If "currently 75000 upside down" means you owe $150K and its worth $75K, buying it back at $75K would make a big difference in payments. If the OP means they owe $500K and its now worth $425K, then I agree it won't make much difference. All that notwithstanding the fact you're not going to get a new mortgage just after going through a foreclosure.
I agree Jon. On an REO, they would not have any grounds to deny it, but then again, if they were to see that the person buying the REO was the same person that they took it from, they could always reject the offer. Besides, how in the hell could anyone get financing to buy it back anyway with a foreclosure on their record? Only way would be to pay cash or find a private lender. Fat chance of that. Investors will not loan 100% of value.
First of all I want to thank all of you who don't have any financial ties to me who seem to care more the bank who stands to lose 75K or more. I make all my payments on time never late in over 3.5 years and I hired a lawyer thats how I got the 6month mod as it is they didn't want to do squat for me in the begining. yes I make good money but I just don't want to give these people an EXTRA 1000 a month in intrest and never get any where when I can take my 2000 a month and put it under the mattress until they kick me out. and I have a co-signer lined up already my dad has a 820 credit score and only owes about 35K on a 350K house was a 500K house 5 years ago. So I figure with my 25-30K and the co-signer I think I could get a bank to approve at least 100K leaving 20% Equity right off the bat. and in my area 100K buys you a 150-160K house right now.
I understand your point Ryan, but you bought the home, you signed the mortgage and therefore it is YOUR responsibilty to make good on your promises regarless if the home is upside down or not. This is just one example of thousands why the RE market is a mess right now. Too many people walking away from their responsibilities when they do have the ways and means to make the payments.
I know of several people who are upside down but have not lost their jobs and can afford the payments. They signed on and will keep on keeping on.
"I understand your point Ryan, but you bought the home, you signed the mortgage and therefore it is YOUR responsibilty to make good on your promises regarless if the home is upside down or not. This is just one example of thousands why the RE market is a mess right now. Too many people walking away from their responsibilities when they do have the ways and means to make the payments."
I have to blame part of this mess on the Government and the loan mod companies. The government, all the way up to obama, says we are going to help, the loan mod companies are old mortgage brokers that can not sell a loan right now, so they are following the market into mods to make a buck. The home owner see 100 commercials a day on payments about to adjust, we can help, and the president giving 1.2 trillion because he cares about the home owner, don't worry help is on the way, and they buy into it. But it is not on its way without a price. The price is your credit, and maybe your house, when you find out the bank does not care, and, or watches the same commercials as the home owner does.
First of all I want to thank all of you who don't have any financial ties to me who seem to care more the bank who stands to lose 75K or more.
You know, that is just uncalled for.
Please explain what the lender owes to you. Did they put a gun to your head and force you to sign a loan with risk involved? Did they force you to buy at the top of the bubble? Exactly what is it the lender did that you now feel they owe you something for you having made a less than perfect choice?
Which is presumably why they approved you for the loan.
Well, of course you are free to default on your financial obligations. But, then don't whine when lenders aren't willing to loan to you in the future.
So, if we have another downward correction in a couple of years will you walk away from that and leave Dad holding the bag?
Wonderful. Good luck with that plan.
Yes I understand that they did not force me into this situation but is it fair that they mae Obsine profits while I drive a 900 dollar piece of **** car and eat peanut butter and jelly for most of my meals while they rake billions of dollars. no this time I am going to get a fixed rate loan from the begining I amnot bitching as so much of the market but 15 percent intrest makes it nearly impossible to get ahead. and the fact that 15 percent intrest translates to 500% intrest at the life of the loan is ludacrius. making your money back and a little on the side is one thing but when you make 600K on a 100K investment no matter the term is insane thats like me lending my friend 10 bucks to gas up his ride and telling him you owe me 70 now but I will take payments.
Ryan, are you really saying you're going to let this go into foreclosure ONLY because you're underwater? No hardship?No big ARM reset?
Yes and NO Under water that happens the market will come back but in order to knock down some of the negative equity I need a reasonable intrest rate. and yes there is no hardship I can afford the current payment but I put 1000 toward principall and 16000 toward intrest on a yearly basis all I want is a little balance Yes this loan is an adjustable if that is what you mean the last adjustment is nov 09.
What an interesting question to say the least. In all of the time that I've been in the REO market, snatching up large lots of properties from the struggling banks (cmon, we can't feel bad for them!) I've never even considered this type of scenario to be honest.
I guess the answer is YES, sorta.
As Jon pointed out, it would be VERY tough for you to go and bid on an REO auction for a single house, that just so happened to be yours before. I don't think there are any regulations or laws that can allow a bank to stop the sale IF by some chance you got lucky enough to win the bid for the property too.
I hope for your sake you are successful at doing this, and you should absolutely keep us all posted on it. The only thing that makes me wonder is if you may be starting a trend here.. which is bad business for me. But goodluck nonetheless OP, you should at least try and win.