Need help on a pre-foreclosure with no EQ.
Have a Pre-foreclosure, 3 bdrm, 1bth, 1206 Sq Ft, Home built in 1952, stick home, in very good shape, does need some elctrical work.
Balance on Mortgage is $124k - Owner bought the home 1 year ago and lost her job right after the purchase.
She is 9 months in the arrears - $916.36 month to a tune of $8247.24 Mortgage holder is Wells Fargo, she said they are willing to do a workout package.
She got her default notice 2 weeks ago.
She said the home will apraise at $126k but I don't think she knows........
No other liens or attachments to the property. Other homes in the area alike are $125k - $135k
She is willing to assign and stay on the mortgage.
But there is no equity and with the arrears, I can't see a way to work this.
Short sale? How does it work?
Can someone help me, I would like to move on this if it's do-able..
Just got it tonight... Thanks
You have to first decide what you are going to do with the property. If you take over her payments, then you are not doing a short sale...you are doing a subject-to investment. In a short sale, you have to buy the property from the owner at a discounted mortgage price, fix it up (if necessary), then resell it.
If you take over the payments, then you will have to pay the arrears plus the cost of reinstating the loan. Then you can find a tenant to do a lease/purchase, where they give you a hefty downpayment to lease it for two years and purchase it at the end of the two years. But, you have to worry about the lender calling the loan due. Meaning, if you're not person on the loan, then they can call it due and you have to payoff the mortgage and get a new one. Usually doesn't happen, but it is possible.
Short sale, you will have to get the workout package or short sale package from the lender. Make sure you have all the documents filled out and your offer to purchase. You will also need to have the homeowner sign an form granting the bank permission to give you access to the homeowners loan information.
I suggest you either flip the deal to another investor for a finder's fee or read more posts and articles on short sales.
Tanya