Foreclose On Myself?
Here is one I have not seen covered yet.
1st mort = $134000
2nd mort = $40000
ARV = $145000
repair = $10000
BPO = $133000
1st mort willing to SS but have not aggreed on price yet. 2nd not willing to take it in the shorts (I offered $500).
The owners were in Bk Ch 7(done now)Judgement is June 4th then 6 months later Sheriff Sale.
If I short the 1st & get the deed can I then foreclose on myself to get rid of the 2nd?
What can I do with the property while I am waiting for the Sheriff Sale? Can I L/O, or retail it or are my Hands tied?
Thanks,
Kelly
You can attempt to buy the 1st from the bank via assignment rather than short sale the property. Then you can proceed to foreclose on the exiting homeowner and potentially get the property for cheap. It all depends on what it goes for at the sheriff's sale.
If you short the 1st and take the deed, the 2nd mortgage will turn into a 1st. There is no way to deal with them now.
I recommend to keep at the 2nd to get them to short. They are very much in a position to lose a substancial amount on this property should it go to foreclosure.
GOOD LUCK
It seems that you would need permission from the bankruptcy court to buy the property at all assuming that the house is part of the Sheriff's Sale. Perhaps you can clarify this. From the numbers you put up there is nothing for any other creditors other than secured note holders.
Assuming that the house is not part of the Sheriff's Sale when the first is paid off by your short sale, the second will become the first. So you will have a house with a $40K first. You will have a hard time discounting this after you own it. Keep working on the second note holder now.
CLARIFICATION
Yes, I meant that I would buy the note from the 1st & continue with the foreclosure to wipe out the 2nd. The BK is completed. The judgement I was talking about was the foreclosure summary final judgement. So, the sellers want to move out in June. What can I do with the property while I am waiting to foreclose on myself till Dec.?
Kelly
Kelly,
If you are buying the house on a short sale and have gone to the loss mitigation department of seller's bank indicating that you are buying the house, the bank is agreeing to accept less than face value as payment in full for their loan. In other words you are getting a discounted property without the loan in place. In this transaction the lender is not selling you the note, but is accepting less as payment in full and the note is extinguished.
If you are just buying the note at a discount, then the seller still owns the house and you can continue with your foreclosure.
if you get a big enough discount on the 1st, you can just pay off the other note.
As for what to do, is it livable? if so, rent it month-month.
Let me know how this goes, I have tried this w/ condos and the HOA leins w/o success. The people always came current at the last min.