All Forum Posts by: Ron S.

You don't really have a problem, because you don't have a deal here. It's not going to happen. I'd spend your time and energy on an arm's length deal. Trying to modify the players to fit your goal is inviting fraud into your world.

The added benefit? Hmm...cash for keys is the only thing I can think of but i'm not sure i'd call that an added benefit per se.

Not sure how a short sale is, "added protection". Added protection from what? and "gets your name out of it"? What's that mean? They alraedy have no contratual liability even though their name is on "it". They have no other liability assuming they have insurance, which they are required to have, and the lender will force place if they don't have so, I don't see any benefit there.

Each situation is different so, your approach will be different. If they've already vacated the home, there are not a lot of incentives that I can see. if they are still in the home, cash to move may be an incentive. Maybe they want a mod instead?

There is no exact answer. Each deal and scenario are unique, as is the pricing of each deal and scenario. The owner has more information that you do typically so, if they are pricing it $100M below comps, they usually have a good reason for doing so. If it sounds too good to be true...

You're going to risk losing this deal for $750? Must not be that good of a deal.

@ Kathy - Nice job! Generally, a pretty good write up. I'd offer clarification on a couple of things though. MANY lenders do NOT take "legal" action to foreclose. In trustee states (States that do not require a lawsuit to foreclose) the trustee for the lender exercises the "Power of sale" clause in the contract and do not use the courts. It's not a requirement to foreclose judicially in most of the western states.

Also, no, you can't put a loan in foreclosure for nonpayment in 60 days and go to sale at day 90 any longer (Thank the CFPB for that). Now, you must wait to file the "first legal" (Usually the NOD) after the 120th day of delinquency and ONLY if the borrower isn't working with the lender on any alternative to foreclosure (Again, thank the CFPB for eliminating "dual tracking" on a national level). And taking a property "Subject to" can trigger the due on sale clause that exist in 99.99999% of contracts out there. It's not Illegal, but it's a violation of almost every contract where real estate is involved.

You don't make an offer to bank such and such as such and such doesn't own it. You have to make a purchase offer with the owner, not the bank that has a loan on it. You also don't find out how much is owed on it unless you are the owner, or the authorized representative of the owner. No you can't do it by calling the bank and no you can't do it by calling the county.

If you want to buy a house in foreclosure, do it the way everyone else does it, talk with the owner and work out a deal with them. If you can't, wait until it goes to sale and buy it on the courthouse steps, like everyone else. If you can't to that, wait until it sells, then buy it from the new owner or, buy it from the bank that took it back, usually through their listing agent.

While this isn't rocket science, you'd be amazed at how this seems to be a foreign concept to so many. There are no shortcuts and no tricks. Anyone that says they deal directly with the bank is not telling the truth or, they are dealing with a one branch small player that doesn't plan on staying in business long.

You are going to execute a note for him in exchange for $1,000? If so, you already own the note so there is no note to take over. If what you meant was, do you take over the note that he is delinquent on with the lender/servicer/bank on the home currently, in the event of default with you? No. You don't take the note over. You are a junior lien holder to them (Assuming you record your lien). So, you can foreclose on him if he doesn't pay you and you would do that subject to the existing senior lien, which you would have to pay off eventually.

Be careful if you become a lien holder and subsequently try to foreclose. Is this person a friend? I'd be cautious mixing friendship with money.

Sorry...this is comical. I'm not making light of your situation, but that of the appraiser and the bank. Appraisers are jokes but unfortunatley they hold the keys here. As others have stated, get the bank to do it (remediation) or, do another loan type if possible. Doesn't seem possible considering you apparently need to make substantial repairs.

Can't get another appraiser because that appraiser has the FHA appraisal case number and the appraiser is the only one that can release the case number to another appraiser. Yes, you can file a complaint with FHA if he's refusing to transfer the case number but when they contact him and he says, "They want to sweep the mold under the carpet (so to speak)", i'm sure FHA might raise an eyebrow on it so I don't think that tactic will work. As minor as the mold may be, in some areas mold is the kiss of death (Literally) so, people do take it seriously as they should. Is this person taking it too seriously? Based on the pics provided, it would appear so but that doesn't matter in the grand scheme of things.

My two cents is, get another source of financing or, get the bank to fix it, or move on to another deal if option one and two don't seem feasible.

There are too many variables to opine with any degree of subtance.

I turned down a short sale today. Agent submitted it requesting we accept 8% of the UPB. I laughed and declined it. They called and asked why. I responded, "8%? Thanks but no thanks". They said, "Thats what the senior lien holder allowed". I said, "Great, tell them to go foreclose. When they do, we'll sue the borrower as a sold out junior". Agent said, "Any counter?" I said, "Yes, have the seller pay us off in full". She said, "What"? I said, "M'aam, the borrower has $90,000 on deposit, on average with our bank. My junior lien has a $16,000 balance and the senior offerred us $1,280? Thank you but no thank you". She hung up the phone.

The moral of the story is, well, there are too many variables to give you a good opinion. Just because a borrower's property may be underwater, doesn't mean they are a short sale candidate.

Also, walking away may not be the best option if they are in a deficiency state. It also may scar them for the next seven years if they try to repurchase a new home after walking away.

Get all the facts and gather as many pieces of the puzzle as possible to try to put together the most comprehensive story of the situation as possible. THEN look for a solution. Probe. Ask uncomfortable questions. Get the balances on the loan(s), etc..

They probably accepted another offer.