In pre-foreclosure for late payments but no money dueowed

6 Replies

Hello BP, I have a home that the buyer, whom I am holding a note for as well as him having a mortgage with Citibank. He’s late consistently sends his check about a month sometimes even two months late. But he is fully paid up on all of his payments. My question is I want to start the foreclosure process against him but if he doesn’t owe money and is just in default due to late payments which is grounds for starting the foreclosure process, what exactly is the process that takes place when no money is owed?

You can’t foreclose, just because you want to. Your state and fed law has laws on when/how you can foreclose. Usually it’s 90-120 days late, after proper notices/procedures.

Originally posted by @Angie Williams :
Hello BP, I have a home that the buyer, whom I am holding a note for as well as him having a mortgage with Citibank. He’s late consistently sends his check about a month sometimes even two months late. But he is fully paid up on all of his payments.

My question is I want to start the foreclosure process against him but if he doesn’t owe money and is just in default due to late payments which is grounds for starting the foreclosure process, what exactly is the process that takes place when no money is owed?

 If you want to end up on the news, you can foreclose for being late all the time. I can't see any trustee or attorney agreeing to handle a foreclosure for you because the borrower is constantly late. That's what late fees are for. An incentive to pay on time and a disincentive to be late. Foreclosing for being late? Yeah...if I were the borrower, I'd dare you to try that one.  There's a good chance you'd be giving the borrower a free home when they sue you and win.

@Ron S. @Wayne Brooks ok so please excuse the misunderstanding. The buyer has put himself in tax foreclosure and it’s been a mess since then.

Verbatim from Mortgage Agreement...

The mortgagee may declare the full amount of the debt to be owed and payable immediately for any default
the following defaults are:

-The agreement states that if mortgagor fails and defaults to make Payment required by Bond or Note or mortgage within 15 days of due date

Failure to keep Any of the promises and agreements (which their was non of the above, he doesn’t even answer our calls) within a reasonable time stated.

So now, with this type of situation. He’s in tax foreclosure has till may 30th to pay $21,000 which he has no intentions on doing. What would be the next best step. If it goes to auction and taxes aren’t paid I lose the mortgage we initially agreed on. I may pay the $21,000 then start the default process.

Idk!!

I thought I seen and been through it all but this is very intricate, especially in respect to holding the note for him. Any chance, there’s a loop hole I can regain ownership?

Thanks any info would help!

Originally posted by @Angie Williams :

Ron S. Wayne Brooks ok so please excuse the misunderstanding. The buyer has put himself in tax foreclosure and it’s been a mess since then.

Verbatim from Mortgage Agreement...

The mortgagee may declare the full amount of the debt to be owed and payable immediately for any default
the following defaults are:

-The agreement states that if mortgagor fails and defaults to make Payment required by Bond or Note or mortgage within 15 days of due date

Failure to keep Any of the promises and agreements (which their was non of the above, he doesn’t even answer our calls) within a reasonable time stated.

So now, with this type of situation. He’s in tax foreclosure has till may 30th to pay $21,000 which he has no intentions on doing. What would be the next best step. If it goes to auction and taxes aren’t paid I lose the mortgage we initially agreed on. I may pay the $21,000 then start the default process.

Idk!!

I thought I seen and been through it all but this is very intricate, especially in respect to holding the note for him. Any chance, there’s a loop hole I can regain ownership?

Thanks any info would help!

 Well...that's a completely different story that your original post. The 15 day provision would be laughed out of court and unenforceable but the tax default is something you could sink your teeth into.

My personal opinion would be...advance to pay the taxes now, send him a demand letter giving him a couple of weeks or up to 30 days to pay you back. Give him a specific expiration date with notice that if he does not pay you back for the taxes, you will foreclose and then send him to foreclosure immediately upon expiration of the demand letter you sent.

I'm not an attorney so please do not take my opinion as legal advice.

@Ron S. This is the one where OP's mom is holding a 2nd behind Citi. Either that or Citi is subordinate -- doubt that.

Just my opinion but whoever is in first is not going to sit back and let May 30 pass without taking some action.

Originally posted by @Tom Gimer :

@Ron S. This is the one where OP's mom is holding a 2nd behind Citi. Either that or Citi is subordinate -- doubt that.

Just my opinion but whoever is in first is not going to sit back and let May 30 pass without taking some action.

 Yeah...caught that finally. Agreed, doubt Citi is in 2nd and agreed, they aren't going to sit back.

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