If you own a note and you can't get it re-performing, how much does it cost to foreclose?
That will depend on where you live, there is no one answer. Each state has its own version of a foreclosure process.
The way to get your answer is to contct a real estate attorney near you. You might want to take 3 bids on this action. The key factor is the amount of time that is required and the amount of paperwork. In Texas it happens fast and it wont cost much, in CA you are in for a ride, in Puerto Rico it will take forever.
Before you go that direction, have you tried negotiating with the currnt occupant. You may not be able to get them performing, but in many cases you can pay them to go away and that can be cheaper than forclosure. I did one where I paid for a moving truck and in exchange the left quietly and gave me a quit claim deed. no legal problems, no destroyed property. Its easier if the occupant is on your side, and working with you.
I hope that helps
thanks. i am all about easy. wondering about the worst case.
It depends heavily on the state, and on the attorney you use. FNMA has some maximums for attorney fees which serve as a guideline for many attorneys. The cost of foreclosure, however, includes court costs as well. Here's a chart which includes both FNMA maximums and estimated court costs. I think these numbers put you in the ballpark of actual cost.
Also make sure you include the recording fees and publication fees. I had a FC in S. Cal. and the attorney's fee was only $1400, but I got a bill for $2,500 for the publication fee @$.70/word. What a racket!
Yes, publication is a racket!
It also depends on the type of loan, a purchase money note funded with cash will have different aspects than an equity funded note from seller financing. A note that can be classified as a commercial loan will be different than a bank note acquired that is a residential note.....mostly due to Dodd-Frank holding requirements that can add to your costs.
You can add costs of collections, stamps for notices, letter costs, but not phone bills or admin time or efforts as such are the costs of doing business. Requirements to comply with the law are legal fees and expenses. This varies by location and the state.
The only way you'll get a good estimate is by calling the Trustee named in your Trust agreement or an attorney in your area. Know too, that you can appoint a new Trustee. Substituting a Trustee is usually on your dime but is rather simple and usually done by the attorney you may appoint free of charge except for any filing fee required. Good luck :)
we always substituted trustee and went with a foreclosure mill.. type company.. they are owned by attorneys but the girls do all the work... and usually just have a flat rate.
so 2500 to 3500 depending here in Oregon for instance.. same when I forclosed in CA.
Yes, and here, I was the Trustee and did all the work.....LOL :)
I've seen them here in NY get inflated to >$12,000.
A couple that we have done have averaged $8,900. If the borrower files bankruptcy during the proceedings it can increase costs significantly.
I had one (commercial) generate $7,900 in costs. Yet the borrower (after 2 years) decided to pay us off including all arrears, penalties & legal fees. He also had to pay all the tax arrears & 2 years of water bills. However, we had enforced the assignment of rents & for 2 years collected a monthly payment that more than exceeded our mortgage payment.
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