NPL Advice - Owner wants to stay but major delinquent taxes

7 Replies

Have a small property with a $95k ARV. Purchased the note for $15k. There are approximately $10k in delinquent taxes. Property will need ~$15k in work to achieve the ARV.

Owner really wants to stay and can (with a BIG maybe) afford a small payment ($500/mo). Unfortunately, the taxes are so delinquent (10 years) that almost all of the payment would go to any payment plant They also cannot afford insurance, so the net would be a very small amount.

Are there any creative strategies out there to workout a small SFR like this? If it wasn't for the taxes, this could be a good re-performing deal.

Any thoughts are appreciated!

At some point the county will auction this off for back taxes. I would check and see if this has happened recently. There will be a period of time you have to redeem property. If the precious note holder was already notified they may not notify you and if the redemption period runs out the mortgage will be erased even if you as new note holder was not notified.

I would say these taxes need to be paid soon by property owner or you as note holder.

@Daniel E. , I appreciate your desire to do the right thing and help this person out if possible, but it really boils down to whether or not they can afford to live here. Based off of what you have said, they cannot. I do not see any way that you can help this person short of charity.

@Daniel E. Sometimes borrowers just can't afford to stay in their home and the reality is that they have to make other arrangements. Unless you want to provide charity, you should proceed with FC. You'll waste your time and effort trying to get something to work. You might find something that will work in the short term and end up foreclosing anyhow in another 6 to 12 months when the borrower fails again. Save yourself a headache.