Owner in 4th year of chap13 house will enter foreclosure

3 Replies

Hey All,

My knowledge of foreclosure and pre-forclosure is minimal, looking for insight.

Back story

A colleague of mine filed bankruptcy on a property in 2015 in Savannah, GA. Bought at 137k market looks like it can support 190-205k. It is need of minor repairs to the best of his knowledge.

Idea

Looking to somehow beat the bank on them auctioning or listing. Not sure this works?

If I can get this property on a discount and flip it, that would be ideal.

How can ornwhen can I contact the bank and how do I go about getting this property under contract before others have the chance?

Originally posted by @Eric Giovannucci :

Hey All,

My knowledge of foreclosure and pre-forclosure is minimal, looking for insight.

Back story

A colleague of mine filed bankruptcy on a property in 2015 in Savannah, GA. Bought at 137k market looks like it can support 190-205k. It is need of minor repairs to the best of his knowledge.

Idea

Looking to somehow beat the bank on them auctioning or listing. Not sure this works?

If I can get this property on a discount and flip it, that would be ideal.

How can ornwhen can I contact the bank and how do I go about getting this property under contract before others have the chance?

Filing bankruptcy doesn't change ownership. Also, you need to know when his BK was "discharged". If it was "dismissed" instead of being discharged it is an entirely different scenario. I'm assuming he filed Chapter 7 and it completed successfully. The colleague still owns the property (although he no longer has to make payments on it and the bank can foreclose) & he needs to contact the bank and ask for a "reinstatement" amount and a "Payoff" amount. Only he or someone "authorized" on the account can do that. If he is that emotionally disconnected to it, it may have already gone to foreclosure and he wasn't aware of it. On the other hand, if it has not gone to foreclosure, payments are racking up every month since the last time he made a payment and the amount to pay the bank may be a lot more than you think.

You need a title report from a local title company to see what other liens on are the property and who actually owns it at this time. I can look up some basic things for you if you want to PM me, but you'd still need a title report.

It sounds like the house is vacant at this point and that isn't a good thing. There may be squatters in it or it may have termite damage or dry rot or whatever. You'd want to pay an Uber driver $20 to drive by the property and text you some photos.

Originally posted by @Eric Giovannucci :

Hey All,

My knowledge of foreclosure and pre-forclosure is minimal, looking for insight.

Back story

A colleague of mine filed bankruptcy on a property in 2015 in Savannah, GA. Bought at 137k market looks like it can support 190-205k. It is need of minor repairs to the best of his knowledge.

Idea

Looking to somehow beat the bank on them auctioning or listing. Not sure this works?

If I can get this property on a discount and flip it, that would be ideal.

How can ornwhen can I contact the bank and how do I go about getting this property under contract before others have the chance?

I just noticed the title to your post indicates he is still in a Chapt 13. He has to have court approval to sell the property if he is still in a Chapt 13. If the bank doesn't object and the trustee says it's okay, then after the several months of time it takes to get those approvals, (hearings, comments from other creditors, and an appraisal of the value of the property) the trustee and bank approve your offer and you have to cash them out right away. You have to have financing in place. It's kind of like deciding to buy a car where all of the parts are on the floor of the garage. You may be able to put all of the pieces together and make a buck or two but the question is "can you make a better return doing something else with your time" and in this case you can certainly make better money doing far less. Let me know what kind of real estate you are trying to get into and I'll point you in the right direction.

If he's in an active 13 and a foreclosure is in process during the 13, that would imply he defaulted on the 13, at least as it relates to the property. While its active (The 13), debtor will need court/creditor/trustee approval and my history says they won't let you buy it directly but instead, will require it to be listed on MLS to expose the property to a broader buyer pool. There are a LOT of details involved and my two cents is predicated only on what you disclosed so, take it with a grain of salt at this point.

Suffice it to say, if there is equity, i'm confident they won't sell it to you at a discount. Other creditors would balk at that preferential treatment and insist it go on the open market to ensure maximum recovery on behalf of other creditors. Assuming the court abandoned the property and let the bank proceed with foreclosure, again, they ain't gonna sell it to you. They'll auction it to the highest bidder.