Interesting One I'd Like Advise On. Loooooonnng
This is a really long story, but in the interest of not boring you to death I will try my best to keep it short...ya right
3/1 property.
Owner purchase property on her own in March 2003, and.... put her "then" boyfriend on the deed in October 2003 ... consideration? $1.00 !!! (dumb..yes)
She put (according to her) @ $20,0000.00 into the prop... new kitchen, flooring, furnace, general fixup.
According to her, the boyfriend did much of the work, but has never paid a dime towards the mortgage.
He feels that when the property sells, he deserves 1/2 of the profits.
According to owner, he is a hard head, a loser ( he was convicted on felony robbery charges)
This is where it gets interesting....
Owner had medical problem...bad car accident...could not work...
When owner could not pay mortgage house was listed with a REAgent immediately.
Was listed with REA in Dec 2003 at $219,000 has not sold, has not had any offers.
Agent recommended lowering price (big surprise) Had an open house 25 people came through the house....no bites.
Fast forward to March 2003...
Received Notice of Lis Pendens. Foreclosure procedures have begun.
She has not paid mortgage in 5 months.
ReAgent has no idea house in now in Foreclosure.
BOYFRIEND (no ex boyfriend) has no idea house is in foreclosure!!
He thought that when the house sold he was going to make a killing.
She is afraid to tell him that the house is in foreclosure....not sure why but can guess.
She wants to give any profit I am able to give her and just give it to the boyfriend so she can be rid of the house and of HIM! She doesn't care if she gets a dime.
She is willing to break listing with RE Agent.
NOW.... let me give you some numbers.
3/1 currently listed at $219,000.00
Most recent "like" sales in area: (comps)
October 2003 $214,000
November 2003 $189,000
November $164,900
January 2004 $189,000
Mortgage amount: $127,000.00
Payment Arrears: $6500.00 + interest and attorney fees.
After paying arrears of course we'd still owe the $127,000.00 on the mortgage.
Sticking point (as I see it) is "ex-boyfriend"
The way I see it ... he has no idea it's in foreclosure and is happily figuring that the house was going sell for around $200,000.00 and after paying the 6% commission, 3% closing costs etc he would end up with $180,000.00 after paying the mortgage he would split $54,000.00 with "ex girlfriend" leaving him with about $27,000.00 with which to buy beer. Boy does he have a surprise coming.
Another piece of information I forgot to mention....
The car accident the owner was involved in was her fault....she was &$)^ faced and rear ended an older lady at
80 mph and then hit a tree... there is a judgement coming her way that may be attached to the house... they have 180 (about 170) days left until that happens (she has the opportunity to work out a payment plan)
The judgement is for $33,000.00. I am not sure how this will or could effect our deal, (if we purchase prior to
the 170 days)
The owner also has tons of debt... why there are no liens on the house right now because of it... I don't know.
She owes about $43,000.00 in debt including car loan for wrecked car (she had no insurance) credit cards etc.... She is back to work now and catching them back up.
So.... where we are now..
She wants me to crunch all the numbers and tell her the amount that we could give her ex.
She would then sit down with her ex and tell him that the house is in foreclosure, that she hasn't made a payment in 5 months etc... BUT that she does have this really nice guy that is willing to get the foreclosure stopped, make up the arrears payments AND give him $xx.xx. She'll further explain that if he doesn't accept it...then he is going to get $0.00, and the house will go into foreclosure.
But remember he's a "jerk" according to her.... he is not on the mortgage!! He is however on the deed.
What would you do?
Thanks everyone! Don't hate me for the length of the post.
I would run not walk away from this deal! You are unfortunately dealing with not 1 but 2 losers. This woman has brought most of these problems on herself. Driving without insurance is both dumb and illegal in most states. She would be better off to let the house go back to the bank. She will then have a foreclosure,repo,and judgement on her credit report.
Michael,
Thanks for the response.
You'd run away? Now..that's not very creative is it?
We know that her problems were created by her... we know that she (and her ex-boyfriend) might be losers...but (and forgive me) I am not sure what that has to do with this deal.
There is a little equity here to consider...
potentially 60K. (of course we'd have to outlay arrears and perhaps offer a token to the owner)...but isn't that payday worth dealing with a "loser"?
Also... (and I ask this with all due respect)... what is your experience level as far as investing?
(helps me to put the answers into perspective)
Thanks again Michael!
Dude...that's a lot of legal crap to get around. A judgement, an ex that might not sign over the deed...blah, blah, blah...Would be great if you could get it...but man...that'd be tough. I agree. Tell her, Sorry lady but you messed up royal on this one. Have fun. And part ways. I guess I just like the easy stuff. I don't really like to work for my money.
Peace,
Mitchell
Hmmm that's 2 votes to run!
I thought (especially in the foreclosure arena), that we were paid to deal with these types of situations / problems.
Maybe this one is just to fraught with negatives? could be.
Anyone else?
Thanks guys![ Edited by gslen on Date 04/01/2004 ]
Oh just to be contrary I could come up with some alternative scenarios.
Theres some equity here if you assume a value of about $200,000. You just have to get clear to it.
To be brief I'd try something like this,
Do not under any circumstances make her mortgage current.
go to the mortgage holder and atempt to negotiate a purchase of her mortgage at some discount. This will require cash or a great line of bs. Who's the lender?
Step into the lender's shoes and file a "friendly foreclosure". In other words, she lays down and lets you foreclose, files bankruptcy and leaves all other debt behind. You agree to let her live there for 6 months or give her some cash under the table.
In the process you foreclose the boyfriend. He's pretty irrelevent anyway except that he has a right of redemption, could cure the default and re-instate the mortgage, this is pretty much your worst case scenerio. If your discount is good you won't mind.
Girlfriends credit is shot anyway so a few bucks toward a new life should look pretty good.
Just one possiblity, with more details I might think of a few more.
Mark
commercial
Thanks for the response!
Hmm the Notice of LisPendens shows Mortgage Electronic Registration Systems..... (I think that's MERS for short)
I looked them up and found this:
MERS acts as nominee in the county land records for the lender and servicer. Any loan registered on the MERS® System is inoculated against future assignments because MERS remains the nominal mortgagee no matter how many times servicing is traded. MERS as original mortgagee (MOM) is approved by Fannie Mae, Freddie Mac, Ginnie Mae, FHA and VA, California and Utah Housing Finance Agencies, as well as all of the major Wall Street rating agencies. .
But on the original Mortgage paperwork there is reference to SIB Mortgage Corporation. as the lender.
Does this help?
Just make this easy. Figure out how much you are willing to pay for the property. make the offer to the girl. let her be on your team and run it past the boyfriend. If he goes for it then go from there if not then move on. the best you can do is get the 2 together and make a deal. if you buy the property before there is a judgment then you are in the clear. Dont get clouded with a bunch of details that have nothing to do with the deal in present time.
wheelerdealer
thank you for that insight. I guess I did present alot of information there.
K.I.S.S .... eh?
Point taken...