Is it risky to be added as an authorized user on a delinquent act
I'm trying to acquire a property after I saw the owners moving, and they said they're letting the bank have it back. I call the bank's loss mitigation department and they said to get any info or begin the negotiations, I need to be added as an authorized user. I am concerned about being black listed from purchasing it in the future or being tied to/obligated to the mortgage of a delinquent account. Can some one shed some light on this process? Or has anyone successfully purchased a property this way?
I would say you can assist with the short sale, but I would refrain from any sort of direct influence with the bank in regards to the property's value.
All your really doing in most cases is finding out what documents the bank wants and making sure they get submitted to the bank as they want them.
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@Chris Dengel, I actually do not know what an authorized user is. If it means you need permission to have access to see the mortgage then the owner who is moving out can sign a consent for that. Obviously for privacy reasons the bank cannot just disclose to anyone how much these folks owe etc. That alone does not make you liable. Find out what documents they want and get some and look them over. See what they say. If there is decent equity still in the house you can buy it from the owners and pay off the delinquent mortgage. If it is underwater you are looking at a short sale which is anything but short or sure. The next step is find out what the bank means and then go to the next step again. Don't quit before you even know what they are saying.
Yes, getting authorized on a sellers account and then trying to purchase it via a short sale could be a red flag. I would agree that a buyer shouldn't be authorized on the sellers side of the transaction to speak with the bank. I've seen buyers blacklisted for writing up offers prior to a property hitting the market and meeting the investors criteria of marketing. Anything that could make the bank feel that the transaction isn't arms length should be avoided; It'd be a shame to have an arms length transaction be construed as non arms length.
Thanks, I appreciate the info. If the property was even close to being a good deal I'd probably go ahead and take my chances, but this place needs a miracle. I'd need a $40,000 discount to make it worth the while and I seriously doubt the bank would go for that initially. I am pretty confident that when they foreclose, the price will come down significantly and I'll get a fair chance. I've have been waiting 4 years for this place to come available and I dont want to blow it the last minute.
If you become an authorized user on their mortgage it will affect your credit. It will make it look like you are severely delinquent and possibly foreclose on a mortgage loan. Basically credit suicide.
The seller's would have to initiate the short sale process. They generally just need to submit a form and some paperwork similar to applying for a mortgage. If you can't get them on board you'll have to wait until it gets foreclosed on and offered for sale.
#2 Foreclosures Contributor
- Paradise, CA
Originally posted by @Josh Engelhart:If you become an authorized user on their mortgage it will affect your credit. It will make it look like you are severely delinquent and possibly foreclose on a mortgage loan. Basically credit suicide.
The seller's would have to initiate the short sale process. They generally just need to submit a form and some paperwork similar to applying for a mortgage. If you can't get them on board you'll have to wait until it gets foreclosed on and offered for sale.
Huh? There isn't any such thing as an authorized user on a mortgage so, there isn't anything that's gonna impact their credit. I suspect there is some mixing of terms being used here. Perhaps the OP means, "authorized 3rd party" to act on behalf of the borrower, in which case, refer back to my first sentence. The only thing an authorized 3rd party gains is the ability to make direct contact with the servicer and possibly obtain borrower information. That's all. Let's not over complicate this.
The rest of the post i agree with.
Jerry W.
Not sure how it is in your state, but in Texas, pre-foreclosures are public information. How much is owed on a note is viewable by anyone.
Yes and no. The information put in the paper can be what the total amount owed is obviously public, but sometimes they put the entire amount of the original mortgage. I think it is a lazy way of doing it, but it is not uncommon. So instead of saying $70K is owed on a $100K loan, they may just say $100K is owing. That does not give you the right to go to the bank and get the outstanding balance. I missed out on a really nice property the first time I saw that happen.
Thanks all. I @Ron S. is correct, authorized 3rd party is the correct term. I am waiting on a response from the bank. Im not worried about my credit being affected. Other than my name, none of my personal info was given.