I sold my parents house after they died 12 years ago and kept the paper a 6%. The person that bought it fell in hard times and I have allowed them to just make interest payments instead of foreclosing as I live thousands of miles away and I don't want the house back. I'm in over my head as I am new to this and don't know what to do. I tried to get them to refi but they have a history of bankruptcy . The note closes in two years with a balloon payment of $400,000 due. If they could refi I'm sure they would have at a lot lower interest rates. Any ideas of what I should be doing? the house is in California.
@William Krostek , what is the house worth?
You could sell the note to another investor and let them deal with the possible foreclosure. Call some real estate brokers in the area and explain your situation. I'm sure they'll know investors who'd be interested
I can't say but when I check the web on what it worth they say 500,000. It's property tax is around 360000
@William Krostek , it really depends on what you want to do then. Personally, I would have started foreclosure as soon as they fell behind. Sounds heartless but it really is best for everyone involved in the long run. If they can't afford to live there then they need to find someplace else to live. At a minimum you should have done a loan mod. I am not sure what kind of precedence you have set by allowing them to not pay as agreed.
If you don't want to deal with it, an investor will definitely buy the note off of you assuming all of your paperwork is in order. You may not like what they offer though. It will be some percentage of the fair market value of the house or the unpaid principle balance remaining on the note, whichever is less. If you want to just be done with it and that is the route you prefer then PM me and I will take a look at what you have. I buy notes and can put you in touch with someone that would be interested at the right price.
Otherwise, your choices are to foreclose yourself, mod the loan, or ride it out (also known as the delayed foreclosure route).
Your right and I should of foreclosed, but at the time houses were at all time highs in Calif. and she had made a large down payment of 20% Then prices fell over 50% and as long as she was making the 6%, sitting on it looked like the right move. What was I going to do with it at half price? Money is not one of my problems so selling the note will not make sense in my case. I had an Addendum added to the paper work at closing stating the buyer agrees to sign a deed in lieu of foreclosure. I don't know if it will do any good or how to inforce it. Should I notify them that I intend to foreclose at the end of the two years so they have time to refi? I'd like to but I'm think she may just stop paying if I do. I have to notify at about 150 days out that a balloon is coming up but that's not a lot of time to come up with $400,000
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