Foreclosure Help On Property With 2nd Mortgage.
I called on a Pre-foreclosed property and he currently owes $366,000 ($266,000 and $100K on a 2nd mortgage). It was a new build in 2000 (sale transaction recorded on 3/15/2000 @ $232,330). The current assessed value is $287,100 w/ 2002 annual taxes @ $1,495.18. Based on the preliminary title search I performed, the highest comparable sale was @ $230,000 on 09/01 (3053 W 29TH AVE - 1.5 story 3BR/2BA w/ detached garage).
Based on this preliminary info, I would have to say the asking price is high! The property has been vacant for 4 months and the foreclosure date is set for May 30, 2004. The gentleman I spoke with stated that he is going through a divorce and avoids the property due to emotional issues.
What happens to the 2nd mortgage if I were to offer him Offer price = FMV-Profit-repairs-Holding costs-acquisition costs. What would you do in my situation? Pass on this one?
The second mortgage is not going to go away, it will stay on the property. You will have to negotiate with the 2nd for a short sale, maybe even to completely write this mortgage off. The second is going to get whiped out on this one anyway.at the sale.
I would get this guy signed up to a contract to buy, with the sale contingent on a short sale with the first mortgage, and the 2nd mortgage.. You are very close on time, at this point the bank may not even call you back. Your comps maybe low, with this much dept the bank and the second couldn't both have missed the mark.
[ Edited by dennis3456 on Date 05/11/2004 ][ Edited by dennis3456 on Date 05/11/2004 ]