First SS Opportunity
Possible short sales opportunity
Have a relative 6 months behind in mortgage and filing bankruptcy in the next two weeks or so.
Intent is to abandon house, they just simply can’t afford it.
Relative does not really care how it goes down because they are leaving anyway, so if I can benefit there willing.
Current FMV $93,000
First FHA $90,000
Second heloc $10,000
Repairs $7000
After repaired value $115,000
Offer
SS first at 85% $79,500
SS second $5000
Closing $2500
Repairs $7000
Total acq $94,000
I see that FHA will go about 85% in a short sale but what is going to be there view on the second?
Looking at the numbers the best offer I could make on the second would be about $5000 or does the second nix the deal because of the FHA first mortgage and I would just spin my wheels.
Any thoughts or is there a better way to structure this.
Yes buy it before the BK is filed otherwise you'll be buying it from the BK trustee
For the first (FHA insured) to agree to a preforeclosure short sale, the second must agree to accept not more than $1,000 as payment in full to release their lien.
So, before you even appraich the first, better have the second's cooperation.
Have your relative issue a letter of authorization allowing them to speak with you, order a ss workout application, help complete the application, then devise your compelling proposal that will accompany the Proposal.
The Proposal for the second can be tweaked and used for the first mortgagee as well.
[addsig]
Thanks for the replies.
Talked with the second and they will only take 70%, the cloud thickened also turns out seller has a third mortgage to the county for down payment assistance to the tune of $7500 and they will not deal with a short sale
Time to move on [ Edited by Ohioinvestor on Date 07/15/2004 ]
Are any of the payments behind? If not or if they are not very far behind you might want to wait and get the seller to deal in a few months. I'm not sure how you can keep the seller interested though. When facing the final weeks before sheriff sale, everyone will deal.
GOOD LUCK
can you buy the 1st note at face or slight discount, and let the property foreclose.
costs incurred are collectable
You either get paid by a junior that doesn't want to be wiped, paid at trustee sale or get the property as REO w/ a 90+costs cost basis.
I have a deal pending like this on a commercial property.
450K 1st on 3M worth of land.
The seller is about 6 months behnd, they are abandoning the house.
Interesting idea to purchase the note will the bank do that on a FHA loan ?
I could only fund about $25k of it though and still have money for repairs and contingencies.
My thinking is that for you to purchase an FHA insured mortgage, you would have to demonstrate your credentials as an FHA approved mortgage loan servicer.
[addsig]
Quote:
On 2004-07-14 19:51, Ohioinvestor wrote:
Thanks for the replies.
Talked with the second and they will only take 70%, the cloud thickened also turns out seller has a third mortgage to the county for down payment assistance to the tune of $7500 and they will not deal with a short sale
Time to move on
<font size=-1>[ Edited by Ohioinvestor on Date 07/15/2004 ]</font>
Not sure about the laws in OH but in OR the bank or lein owner cannot come after the person in default after the foreclosure has taken place. If a person has a loan for $200K and the house is trashed and sells for $120K then the bank is out 80K.
In this case the second mortgage would probably end up with less than 3k after the first mortgage is taken care of (also dont know about OH, but does the bank take the foreclosure fees from the sale?).
Then again some banks have pretty strict regulations, but it wouldn't hurt to show them they stand to lose $10K, but you are nice enough to offer them $3k.