HUD Repo ? New At This.
I've found my first presale forclosure and need some suggestions. I hope to be able to negotiate a short sale with both HUD, (=the 2nd).. $66K owed to HUD and $20K (the first) owed to another lender.
The first ($20k) that is in forclosure now -sale in two weeks). It is worth about $115 as is. It needs some work (maybe $8K) to bring it up to a resale value of $125 - $130K.
I need some sugesstions here: The owner is willing to sign the deed over to me if he can get some cash? Is that legal??? Can I ask for a short sale for the first lien ($20K owned) or just on the HUD ($66K)? How much would you offer? THANKS for the help.
New-at-this.
Are you sure that HUD is not the first.?
Most short sales fall through if the BPO comes in too high, which is often the case.
If the property isn’t in need of serious repair, it is unlikely you can convince the lender the property is worth a whole lot less than the appraised value
Don't expect a lender to accept a discount just because it sounds good to you.
Your keys are:
1. Does the homeowner truly deserve a short sale?
2. Is it in the bank's best interest to take a short sale or repossess the house and sell through a realtor?
3. Are there any hidden factors, which might affect our ability to recoup a loss assuming a lender must repossess.
4. How many properties does the lender currently have in default?
5. How flexible is the investor backing this loan?
6. Is a third party servicing this loan?
7. What is the demeanor of the loss mitigation person you are dealing with?
The HUD-1 Net Sheet is yet another key that shows how the money is to be dispersed at closing. The lender looks for immediately recognizable and usually unacceptable red flags, such as: excessive commissions in this transaction, no cash to seller. Acceptable entries in the HUD-1 should indicate:
1. The buyer's name (you or your trustee)
2. Seller's name
3. Property address (you are buying)
4. State a closing date (at least 45 days from acceptance letter)
5. Show sales price (just over lender's payoff
6. Ernest money (always at least $500)
7. Where the funding is from (cash or loan)
8. Taxes being paid (call the tax department)
9. Lender information (how many points)
10. Insurance (approximate)
11. Closing agent's fee
12. Title search
13. Excise tax (call you registrar of deeds to get this)
14. How much your pest control or abatement guy would charge
HUD is normally not in a second position - I suggest some court house research to make sure of your facts.
Market value as is $115,000
HUD note $66,000
Other $20,000
Repairs $8,000
HUD has a 57% LTV
It is not likely that HUD will consider that they can sell the property for $115,000 with such a large return.
At this point you are not dealing directly with HUD, as they are not the lender but the guarantee of the loan.
Well ,I think so. The HUD rep said that they ran a title search. I'll do that as well if this looks likes something good. I know that seemed a little strange to me too.
cah, what you will want to do is make a separate transaction from the prop. make a " Bill of Sale" for misc. thing in the house such as dishwasher, refrig. etc. and make it as high as you want. this way it seems like you are buying these personal iteams from him and they cant get you on giving the seller money later on...Goodluck, Ryan
Thanks for all the good ideas and tips. I'm so happy that I found this forum.
The owner is cooperative and I would most likely be able to work something out with him re: cash to him. However, it sounds like a "short sale" may only be to MY advantage. But I got the idea because the HUD rep.suggested that I make an offer for a short sale.
cah
Quote:
On 2004-08-22 20:38, I_Need_Help wrote:
cah, what you will want to do is make a separate transaction from the prop. make a " Bill of Sale" for misc. thing in the house such as dishwasher, refrig. etc. and make it as high as you want. this way it seems like you are buying these personal iteams from him and they cant get you on giving the seller money later on...Goodluck, Ryan
I would not recommend this type of transaction! :-(
To be a professional investor one must avoid any illegal activity, as is the nature of this type of transaction.
This is fraud and many have attempted this and have paid a vary large price.
[*]Property seizures
[*]Imprisonment
[*]Banned from making any real estate transactions as an investor
[*]And the list goes on
Do real estate the legal way and you will sleep much better.