Relative may lose home how do I take over
Paying ^
Nabil Suleiman , first make sure you want to mix business and family.
If you do and it is a good deal, you can try to buy the property "Subject To" (search the term on BP or Google it).
Percy N. Thanks Percy, yea it's been a difficult decision to make, but don't want them to potentially lose the house. Thank you for your reply and suggestion!
@Nabil Suleiman how far behind are they in their payments and has there been any action taken by the lender such as sending Notice of Default?
Assuming this property is in CA? Is it their primary residence?
Percy N. They are three payments behind yes primary residence. I'm not sure about the remainder of information I'll be finding those details out soon when bringing these strategies up
#2 General Landlording & Rental Properties Contributor
I would stay out of the situation and simply advise them to sell. There will be no benefit in you getting involved and it will likely result in strained relations.
If there is no financial advantage for you that would be worth damaging the relationship over then there is no point in being involved.
Never mix money and family in business decisions.
@Thomas S.Thank you Greg
I wouldn't work directly with family, but maybe you can connect them with another investor to either assume or do subject to. The family members would have to realize they can't stay in the home. With a subject to at least their credit would get repaired in the process and they can start moving forward.
@Nabil Suleiman Is it a temporary situation or a reflection of how they manage their money? I wouldn't assume the responsibility if I felt it was a reflection of their money management. However, if it were due to a medical emergency or other unforeseen circumstance, I might be more inclined to help.
I would ask them to explore all of their options first (e.g. borrowing from LOC, personal loan, selling cars, selling house, etc.) but you or another investor would want to look into a "Subject To" deal and a rental agreement.
If they are 3 payments behind likely the lender does not want to foreclose. As part of a servicing agreement for the investor on the house loan there are certain protocols to follow.
If for example a lender simply foreclosed without following all the other workout guidelines for a defaulted loan then the insurance company on the loan would deny the claim.
If the current owners put down more than 20% when they bought then usually there is not mortgage insurance.
General file flow is mortgage is past due customer service calls. Start getting a few payments behind collections steps in. Even more behind loss mitigation calls for workout options. After that pre-foreclosure department steps in.
Have they received a foreclosure notice yet?
Hud offers counselors they can contact.
http://portal.hud.gov/hudportal/HUD?src=/i_want_to/talk_to_a_housing_counselor
Would stay out of this situation.
No legal advice given.
Agreed with almost everyone here; don't mix business with family. By all means, connect them to your realtor, fellow investors, etc. but don't try to make a profit here. Any money to be made is not worth the strained relationship.
@Joel Owens Thanks Joel. Yes I believe they almost went into foreclosure before but ended up going through a program to hold onto it. At this point ill likely stay out of it, just want t guide them the right way.
@Jacob Pereira and the goal was more or so to keep them in their home more then anything else.
Thank you both!
@Suzanne Griffiths and @John Casmon thank you both for your input and advice