House in Foreclosure, HUGE ARREARS
Is there any way to buy a home, FMV of $220K, Loan Bal 145, Due to BK the Arrears are $69K. Home needs $5000 Carpet and interior paint($1500).
Is this a candidate for a short sale, and how would that work? Would I be able to qualify for this on a stated loan?
What is the best way to get this house bought? The sale is June 3rd, and the sellers are packing to move.
Gary-TX 
Hey Gary, Clif from West Chicago here.
Not sure if I understand the Q. The arrears are additional liens?...How much is tacted on to the loan balance?...int. attys fees, etc.
What is the exact payoff amount?
$6500. in coz is minor...if $69k + $6500. is added to your balance then you have a neg. balance of $500. What are the particulars of the house...?
I thought you were looking for birddogs in Dallas...I applied, and am still interested...
Is this a test, seeing as how you're the long time investor according to your profile..
P.S. Don't understand why the BK is mentioned as a factor in the foreclosure...What arrears are worth $69k...has to be something large attached to the mortgage...at most the house has been in foreclosure for a year...what's the original amt. borrowed and for how long? When was the last time the taxes were paid?...If it's a preety house and only needs carpet and painting, why would the lender short sale it?
Is it in a war/drug zone? More info. seems to be needed.
Confused, Clif [ Edited by pbodys on Date 05/05/2003 ]
Clif,
No, this isn't a test. The house was bought for $159K in 1994, it is in a golf course community with pools and tennis, etc.
Yes, the $69K includes fees, and needs to be paid to reinstate the loan. No, I wouldn't pay that much for the house, but there are a lot of investors on this site who deal in short sales. I am hoping that I can get some guidance in how to buy this house for Loan balance or less. Do you know how many house were foreclosed on last year? Do you think the banks really want to be in any other business than lending money?
Somehow this house, since 1997, has been in BK. There are over 30 payments in arrears.
And, yes, if you move to Dallas, I am still looking for 4 more bird dogs.
Gary-TX
Hey Gary, I'm your man, tell me when to be there..
Here's the Guru on Short Sales
Dwan Bent-Twyford
Here's one of Dwans articles: kinda long.
Here is how it works: A homeowner calls you and tells you he is in foreclosure; owes $95,000 on his property; it’s worth $100,000 and he is 8 months in arrears. He wants to move on with his life but can’t sell his house because he owes what it is worth. Here is where you come to the rescue. You meet with the homeowner and have him sign an “Authorization to Release” form (this gives the bank permission to speak with you about the account) and a sales contract for the amount you are willing to pay for his property. In this scenario we are going to offer $50,000.
Next, you call the bank and ask for the Loss Mitigation Department. This is the department that handles properties that are in foreclosure. Tell the person handling the account that you are trying to help Mr. Smith with his foreclosure and you are willing to buy the property from him. However, due to it’s poor condition you are only willing to pay $50,000 as payment in full. Fax the sales contract for $50,000; comps in the area; an extensive list of repairs that are needed to bring the property up to marketable condition; a net sheet (a title company will help you with this); and some really bad pictures. The bank will then review the information and make a decision. Let’s say they counter at $65,000; you counter again at $55,000; they accept! It’s that simple! We short sale many, many mortgages every year. Banks are not in the business of owning properties. They would rather short sale a mortgage than go to the courthouse steps.
Dwan's link is at the top of this page boss.
Hope this helps. Clif [ Edited by pbodys on Date 05/05/2003 ]
pbodys,
you may be "the man" but Dwan is definetly not!
Ty
Editing, shmediting ---- no fair taking the "He" away from Dwan!!!! Now my post is outdated!
Ty
Why Ty,
Whatever are you talking about?
"He"...not me!
Clif
ty
Thirty payments in arrears sure sounds like mortgage co. ripe for a short sale. They will probably jump at the chance to get ANYTHING out of an asset that has not been producing for 2 1/2 YEARS. the one thing to be sure about is that the occupant is ready for you to be the new owner and for them to be on their way.
Great Luck,
KP
If the home is worth approximately $220K and has a balance of $145K and needs only $5K in repairs and the first mortgage lender has done a BPO, I doubt they will budge. I know there are countless posts on TCI on how you offer banks 50 cents on the dollar in these short sales and how these banks will jump at the opportunity to cash out and take a huge loss. However, its been my experience, albeit I am no expert, that banks are a bit more savvy than that. They will usually eat a 10% loss without much angst. Beyond that you will have to justify that the bank really isn't worth what their brokers price opinion says it is.
When theres a junior lien its easier to convince them to eat a bigger loss but when theres plenty of equity, only a first mortgage, and minor repairs you're hard pressed to buy it for pennys on the dollar.