**Note Buying W/Bankruptcy Property**
Hi,
If anyone out there has input on a situation I'm facing, it would be greatly appreciated...
I have been working with a homeowner that is currently in a chapter 13 bankruptcy with scheduled payments. He has a house that is non-homesteaded here in Florida. He owes the mortgage co. substantially more than the house is worth, and the co. has offered me the oppty to purchase the NOTE from them for a huge discount. Title search has shown no other encumberances other than the Lis Pendens recorded with the County bye the MTG Co..The foreclosure process was halted by the bankruptcy. My question is: How easy is it to remove the house from bankruptcy? The owner's attorney has not been helpful, as they see me as scooping the property for a great price, which is true. But, with me in first position as the note-holder and the property worth less than the note, am I in the clear with bankruptcy court? Do I need my own attorney to request it to be removed? Also, the owner will warranty deed or deed in lieu, whichever I want, so I would control the deed & debt...Any hitches anyone foresees with this?? All responses greatly appreciated...I just don't want to have any unhappy surprises dealing with a Federal court system and don't want to fork over a substantial sum to the Mtg co. only to find out I get screwed in the end in some way...Thanks to all!!
Just to clarify, you are purchasing the note, not doig a short sale, right?
If so, you don;t have anything to worry about with the banko court - the debt will continue to be in place; owed by the owner of the property to you.
However if your end plan to is take ownership of the property, you'll have to get it cleared by the banko court - the asset will be protected by the bankruptcy, therefore it cannot be sold without court approval, something that should be fairly easy to obtain in your situation.
Thanks for the reply sir...Yes, it is a note sale...I had a short sale agreement with the bank and it expired due to the owners' attorney dragging their feet getting it released...The end game is ownership, and being that I will not finish the foreclosure, it is win-win for all...I am a little confused about what deed I need to get from the owner though...deed in lieu? warranty? Also, since there will not be a "closing" in the traditional sense, what about title insurance to guard against any problems even though at this point the title looks good. Thanks again