Who Do I need to talk to about these abandoned houses?

Question

There's a subdivision in my area with 3 abandoned houses, built from 2006-2008.  These are what I call "simple brick" homes, rectangle shape, 1800-2200 sq ft. or so.  We're in a rural area, and I would REALLY like to purchase one of these homes for my personal residence with a USDA loan.

1) One is being serviced by BofA, and they told me I would have to contact the homeowner because it hasn't gone through foreclosure yet.  Neighbors say it's been vacant (and unpaid) for at least 6 months.

2) This one, all I know is it's been vacant for 6-8 months, and not gone through foreclosure yet.

3) This one is an REO with Freedom Mortgage.  Been vacant almost a year.  I called them and they told me an attorney & broker hasn't been assigned yet if there's nothing posted at the house.

Account Closed · Answer

Shane:  IMO, you will have better luck with #1 and #2.  Find the owners and see if they will work with you.  As for the mortgage balances, just look up the original sale and deed of trust(s).  If the properties are that new and have already been bailed on, it's not like the owners have any equity and they likely owe what they borrowed plus late fees, etc.  Mortgage balance doesn't matter if you can't find an owner to work with.

USDA is a great loan if you can get it.  Have you worked with a broker or a regional office to see if you qualify.  The income verification requirements are strict.

Shane Woods · Answer

Quick update...after some more digging, turns out House #2 IS the recent $145K-ish comp.  Just sold last week.  So now we're looking at #1 (BofA Servicing) & #3 Freedom REO.

I'll be digging more and finding contact info in the next few days...will keep you all posted.

Shane Woods · Answer

Thanks K. Marie Poe.  I have looked into USDA until I'm blue in the face for the past several years, before I even thought about investing.  We qualify very easily, and have for several years, we just couldn't "afford" to own a home.  We can now, and we weren't really looking, but something told me to drive that subdv. yesterday and those houses were screaming at me. :)

Will Barnard · Answer

Shane,
Public records will show the deed of trust with the original amount borrowed. You can do the math to estimate the current balance based on if all payments were made. Without an authorization to release information signed by the homeowner, the bank can not give you any info on the loan balance.

If a NOD or NTS has been filed, the doc will show the amount owed to the lender on that, another means to find out. (I am speaking from disclosure states like CA, not sure about all States)

K. Marie Poe - Curious why you believe option 3 has little or less chance than the first 2? I have been very successful in the past getting deals from finding pre-MLS listed deals by calling on the contact info on the paper sign in the window. I have also met a ton of REO brokers this way to feed me deals pre-MLS. I think it ia a great strategy and one to consider.
Now that I mention that, he should pursue all 3, why leave any opportunity out!!!

Shane Woods · Answer

Thanks Will Barnard.  Is there any way for me to find out what they owe on #1 & #2 other than asking them?  I will absolutely contact both of them, just curious if there's a way to get that info if they don't have it or don't want to divulge it?

Will Barnard · Answer

#1 and #2 appear to be short sale opportunities, contact the homeowner (you may need to run a skip trace on them) and see if they are interested in that scenario rather thna losing the home to foreclosure.
#3, Keep an eye on the home for any agent activity. Once you see the white paper sign with the contact info on it, contact them and see when they plan to list it. Hopefully you can get in and get an offer before it is listed.

Shane Woods · Answer

Steve K, thanks for your thoughts.  I plan on persuing #3, as it's the bigger house and better layout.

Is there any reason I couldn't work a short sale on house 1 & 2?  USDA will buy short sales as long as it meets FHA inspection guidelines, which both do.  #3 would need a new HVAC to meet FHA.  The outside unit has been stolen.

Shane Woods · Answer

To give a little more info about the subdivision, there are about 20 of these houses, all around 1500-2000 sq ft, on 1 acre lots.  They were selling for $130-160K new, but that was in 2006-2008. Rehabbed nice, there's one comp for $145.  The other solds are not nice and around the $46-53 per sq ft range.  Both of these were REO's.

Steve K · Answer

You're probably sunk on #1 and #2 unless you can convince the banks to sell you the note and you're able to get the previous owner to do a cash for keys/deed scenario.

Further digging with Freedom might net some results on the third house.