Got a call today from a lady as a result of a yellow letter. When talking to her she mentioned she has little to no equity. But then when I asked what she owed she pulled out her mortgage statement and tells me that it states her primary balance is $37k with a deferred balance of $57k. I got home and pulled a copy of the recorded mortgage online and found that it's an ARM from 2006 now held by Wells Fargo. The initial payment amount was $619.47 and the rate was 9.5% (figured at prime +6.99%). When the changes are calculated they are to be amortized to 1/1/2047...but the loan maturity date is 1/1/2037. What's going on with this loan? I don't think I've seen anything structured like this before. She's very tight on the equity and the property likely needs at least $15k in rehab costs. ARV is $80-$85k. I thought about a lease-option or sub-2 to help get her out of the house. She owned the house with her now-deceased mother and just wants to get away from the memories (but I don't want any bad memories of my own associated with this place). Any ideas/advice on what I might be able to do here?
Yeah I've seen several of those lately. The payments are dropped to 31 percent or lower of their gross income but at the end of the predetermined term, a large sum is expected. Not to mention before she's done making payments, she will be paying 12%+ Is she behind on payments? Have you looked into short sales? I have done a couple but I know most people try to run away from them. She won't make any money off the house and the banks tend to only go for it when they are far behind getting close to foreclosure. You also need a good real estate agent to work on it.
I thought about short sale as well as assigning a lease-option. Numbers seem awfully skinny though. I always seem to end up with the skinny deals. :/
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