Discounting post Chapter 7 note by 2/26
Anyone ever discount a note that has been discharged in Chapter 7?
Working with a short-sale on a 1st who is ready to proceed with a release from the 2nd. The 2nd states that the loan was charged off and closed. There is no liability from the homeowner to pay it however, it still remains on the house.
1st is @ $94k all-inclusive. My offer is $87k. 2nd is $39k. House is worth $120 or so...will be a keeper. light cosmetics.
2nd will lose all in a day. I thought to offer them $1000 for an assignment of mortgage. Probably not worth their time to process, though. Not willing to do much more for them considering the numbers. This will allow me to release the lein contingent upon short sale consideration by the 1st and ask them to stay the sale for time. Otherwise, I'd bid at the auction in 2nd position to win&win or lose&win.
Any other last minute ideas?
Just a question... If you are going to offer the 2nd mortgagee the sum of $1,000 to release it's security interest... they'll lose about $38,000.
If the house is worth about $120,000, why wouldn't the second mortgagee simply bid at Sale and recover more than $1,000 and possibly up to $20,000?
And don't give that lame line, "Banks aren't in the business of selling houses"
because that's a bunch of nonsense.
I asked them to release, assign for $1000, or use some sort of equity sharing trust ala D. Ali and split the proceeds. Got a call after my faxed offer from their law firm. Their first offer was to release for $.10 on the dollar - $4000.
I said that I would not pay for a release, since I have no control over the 1st mortgage to stay or at the sale. I suggested my $1000 offer to assign the mortgage to me to the Atty.
Waiting games...
They'll probably call at 9:00am before the sale at 1pm.
The mort co., H0u$eh0ld, has no interest in bidding at the sale. They aren't anywhere near Montgomery County, PA. You really think they are likely to bring the 1st current at such a high LTV, hold the property, pay commision on the whole sales price, and come out any better? OR just take a guaranteed cool 1 grand? They already charged it off in the chapter 7 discharge.
I'll wait for their last ditch effort, or pass. There are more deals out there.
TheShortSalePro,
Have you done much work in Jersey with right of redemption? I'm starting to work on a few each week in New Jersey now. Owner occupieds have been a little tough, but the vacant ones and rental owners are pretty keen to it. I'd like to talk about it sometime when you have a chance.
Jeremy
We have a 10 day ROR in NJ. Got a call last week from a man who said that he lost his home to sheriff sale for $60,000. FMV was about $130,000.
With some minor due diligence... it could have been a sweet deal, even though there were just days left before ROR expired. But, his lawyer snatched it up.
HFC/Beneficial rarely walks away from these situations without compensation. Especially if the appraisal is confirmed to be accurate.
Though they might not have a commercial presence in that particular town, they participate in a national organization that buys and sells discounted notes to investors... investors who do go to local sales. Each individual investor has his own particular strategy on post sheriff sale administration. Would you let me know how this turns out?
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We have a 10 day ROR in NJ. Got a call last week from a man who said that he lost his home to sheriff sale for $60,000. FMV was about $130,000.
With some minor due diligence... it could have been a sweet deal, even though there were just days left before ROR expired. But, his lawyer snatched it up.
It went to sale. HFC didn't make any additional offers. I didn't either.
I put $162k in escrot on another deal where we are contesting the Attorney's fees... Udren out of Cherry Hill. They're asking $172k with the principal balace being $135k. The judge is reviewing. Should be interesting. Our payoff is based on the judgement and the per diem.
Jeremy
Who was the successful bidder? It would be interesting to follow the chain of title in this matter 'post sale' and see who acquires title. My guess? HFC, it's successor or assigns.
HFC lost out. They didn't have representation at the sale. They got a big goose egg. Serves 'em right. GMAC (the 1st) took it back on their FHA loan. Looks like it'll be on the HUD list sometime soon (read next year or so .
Jeremy