How Can I Acquire This Property Before Foreclosure?
Just talked with a gentleman who has a duplex that he's deliquent in mortgage payments & a couple years of taxes. He's claims he doesn't have the lender's contact info and is willing to let it go into foreclosure. Is there a way I could acquire the place with minimum to no information?
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#2 Real Estate Agent Contributor
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- Coppell, TX
You will need to find the lender....shouldn't be that hard...there is some document likely recorded with the county clerk.
At this point maybe even a foreclosure notice. Sometime you can get this online, sometimes you have to go in person.
Your local friendly title company might help.
Have you calculated what kind of equity might be there? Is it worth pursuing? Just because it is delinquent doesn't mean there is value there. Possible, but not always.
Quote from @Bruce Lynn:The mortgage should be recorded at the county's recorder's office. That will greatly help you in your search.
You will need to find the lender....shouldn't be that hard...there is some document likely recorded with the county clerk.
At this point maybe even a foreclosure notice. Sometime you can get this online, sometimes you have to go in person.
Your local friendly title company might help.
Have you calculated what kind of equity might be there? Is it worth pursuing? Just because it is delinquent doesn't mean there is value there. Possible, but not always.
I also recommend what Bruce said about equity or else it may be a waste of time/energy/resources.
Agree with what everyone else said. However, you might just be able to buy it from him directly, depending on where the lender is in the foreclosure process.
Make sure you factor in the taxes and that there will be potentially a lot of mortgage interest/late fees/FCL fees/etc you will also need to be paid at the closing table.
I appreciate everyone's valuable input. I just needed to know if it was possible before taking the next steps that was recommended by you all and not waste my time. If this 1st step wasn't possible I wasn't going to look into the numbers. I'll look into the lender info or county clerk next & run my numbers.
Quote from @Donyelle Keith:
Just talked with a gentleman who has a duplex that he's deliquent in mortgage payments & a couple years of taxes. He's claims he doesn't have the lender's contact info and is willing to let it go into foreclosure. Is there a way I could acquire the place with minimum to no information?
I'm not sure why he wouldn't have the lender's contact info. They've certainly been sending statements and late notices - not to mention the notice of default and other legally required foreclosure documents.
If he's willing to let it go in foreclosure, maybe that's because there's no equity.
You need to ask to see a recent document showing what he owes including fees, and also determine if it's not too late to reinstate. You also need to search title for additional liens, plus determine what's owed for property tax and any other assessments such as sewer, etc.
If you determine there's a deal to pursue, you could,
• Offer to purchase subject-to. But you'd need the option to reinstate and a clear understanding regarding taxes and other liens.
• Offer to buy an option to purchase at a later time. You should use a closing agent to be sure your funds are used to reinstate and bring any other delinquent obligations that could attach to the title current.
• Make a short sale offer. His lender will need to approve. If they don't want the property and there's little equity, this might be appealing to them.
@Marco Bario he said 1) they sent him a letter awhile ago stating they weren't going to charge him anymore for the property. 2)When I asked he if had a statement or the lender's info he said he moved and threw away everything. It was rented and the tenants trashed it, so he didn't want to deal with it anymore. Plus his wife didn't want him putting any more money into it. He said he rather have the debt on his credit than to deal with it...smh. The kicker is he has the money he said to get it caught up but hates landlording due to the tenants trashing it. Yea the sub-to definitely or even a the other two options but without the lender to contact I needed to know if it was possible to reach them. It's my understanding if he's still on the hook I would need a limited power of attorney or him telling them I'm permitted to discuss the mortgage with them.
You're correct about needing the LPOA / authorization from their borrower.
Since he hates landlording, another option would be to offer to master lease the property with an option to purchase. The master lease agreement would grant you the ability to sub-lease. It sounds like some rehab or at least maintenance is necessary. Either the master lease or the option could allow that any money you spend to get the property ready to rent may be credited toward funds he'd receive.
@Donyelle Keith
It’s hard to wrap my head around the owner not knowing who his home is mortgaged by. Even if the original lender sold the loan he could call them an ask who the loan is owned by. Also they won’t talk to you unless they have permission to talk to you buy the mortgagee … for privacy reasons of course. Tell him to call his bank to see who ACH payments were going to. Or to call the lender that he was sending a check to. It’s not hard to find someone looking for money. Good luck.
— justin
Quote from @Marco Bario:Good options. It needs some work but depending on what the lender wants to satisfy the debt & the amount of work, it could be a great cash flow income.
You're correct about needing the LPOA / authorization from their borrower.
Since he hates landlording, another option would be to offer to master lease the property with an option to purchase. The master lease agreement would grant you the ability to sub-lease. It sounds like some rehab or at least maintenance is necessary. Either the master lease or the option could allow that any money you spend to get the property ready to rent may be credited toward funds he'd receive.
Quote from @Justin Reader:
@Donyelle Keith
It’s hard to wrap my head around the owner not knowing who his home is mortgaged by. Even if the original lender sold the loan he could call them an ask who the loan is owned by. Also they won’t talk to you unless they have permission to talk to you buy the mortgagee … for privacy reasons of course. Tell him to call his bank to see who ACH payments were going to. Or to call the lender that he was sending a check to. It’s not hard to find someone looking for money. Good luck.
— justin
I don't believe that either to be honest. It's crazy that I've come across a few people on the verge of losing their property and instead of exhausting their options they pretty much throw their hands up and just walk away. It baffles me.