Please Take A Look At This Deal And Comment.
Got a phone call about an hour ago. Lady is in foreclosure. Sale is on the 23rd of Feb. Behind little over 6,000 FMV 150+ owes 153+ with late fees and such. Payments are 1500 PITI and intrest rate is 9.25 The owner doesn't want the house at all. (Family problems) She has it listed with agent for 160+
Her bank has called 5 times in past 2 weeks to offer a payment plan or refi. My idea is to talk to bank work out payment plan on back payments. $3000.00 now and add the other $3000.00 to backend. Take sub to and sell on contract. I don't think I can pack the payments on this one. Rate is high. (Whoever thought saying 9.25 is high)
I meet with her tonight. Like I said she wants out. Is the fast sale date a problem? Thanks for the help.
James
Must be a bad plan. No one has a comment.
James,
There may be many new investors looking at waiting to see what some of the pro's think. Learning from watching..
Being new myself...take it for what it is.
FMV =150K
Lien = 153K +6K in back payments
I don't see the deal here, unless you can do a short sale (which I know nothing about).
Please explain where you are making any mnoney on this deal. I don't see any. She owes 153 on a house with a FMV of 150 and a payment of 1500 a month. Please explain where $$ is to come from.
I would look at working out a forbearance agreement with the bank for the back payments. I would ask them to drop the fees though. Talk to the bank and see what they will negotiate. If you can't work anything out with the bank, see if they would consider a short sale and flip to someone who does short sales. The payment is way to high, interest rate way to high, and I would pass personally....but that's just me.
Thank you all for the imput. I was just looking at the post an had a few more questions.
1. Houses rent in this area for $1500 a month. So why can't I Contact for Deed this place at the current PI with the clause in there about taxes and insurance rasies. Have my buyers do a refi in 2 years. Set selling price at 163,000. If the bank takes the forebarance I still make 10,000 Plus my down. No bump but ?????
2. Will a bank postpone a sale while the owners work out a payment plan?
If this is a stupid idea let me know. I like to think out loud and this forum lets me do that with feedback.......
James
I really dont see the deal here unless you can discount the note.
Personally unless you can get the bank down on there price I would just wait until foreclosure and get it then. If the loan is assumable you may be able to get someone else to pay the 6K and assume the loan, but that still leaves you with no money.
Kyle
Personally, I'd walk away from this one unless your motivation is to simply help these people out and be a good samaritan. It sounds like there is no equity here. If you were a buyer looking for a house at full market value to live in and you really loved this house that would be one thing. As an investor you are looking for a deal. This isn't one. If you want to buy a house at full market price you can get one with a lot less trouble for your time than this one. Thats my two cents worth.
James,
This is not a good candidate for a subto deal, no matter how you try to figure it.
It would make a good short sale deal, especially if the bank is so willing to work with the homeowner, they are probably not really wanting to foreclose.
You could also try to just buy the note at a deep discount. This will look better on the lender's books than a foreclosure and they may consider it. If you go this route, you could either finish the foreclosure, or be nice, and forgive the debt in exchange for the deed.
Roger
Just got back and as you all have pointed out it is not going to work as a sub to. The bank is Ameriaquest. They really don't want to foreclose. I am thinking of trying a short sale. I have never done one but do have some of the info from Short Sale Pro. If anyone has advise for me on this please let me know.
Thank you nice to get good honest helpful advise. You guys are the greatest.
Hi,
/foreclosure dept. Ask them to fax you a short sale pack and order the BPO, "cause we want to move on this thing". Make sure and get contact names, direct phone numbers, direct fax, direct email of people in loss mit. Have the HO's loan number and ss#. Don't tell them you are an investor "I am trying to help the seller avoid bankruptsy".
This is rookie info as I have not done a short sale (or any as of yet) but this sounds like short sale material and just last night, I attended a 2 hour forum on short sales at my local REIA, given by an investor on his 4th short sale.
All this info is per the investor at the seminar:
1. What type of loan is existing- FHA, VA, convetional? He said a good rule of thumb is to offer the bank 82% of the BPO (Broker's Price Opinion),not the loan amount, on FHA or VA loans. He did not give a percentage for conventional loans.
-The BPO is a person the bank sends to the property to tell the bank what the property is worth. You are helping the seller so you should have a key to their house. Tell the bank that when they send out the BPO, the BPO must call you to meet you at the house because you have the key to let them in. Get there first. If you already have for sale signs in the yard, take them down. Don't make the property look too good- crook the blinds, no air freshener... Find out the value the BPO is giving the bank and offer 82% of that. This investor offered way lower than that on some of the loans but I don't know what his criteria was for his offer. He also said, do not let the bank know you are an investor- you are a friend of the family trying to help them out of a tough situation. Make the "investor" a third party.
2. You need to get a letter from the HO (home owner) authorizing to release info to you from the bank. You will need the loan number, loan info, her ss#, her signature, customer service phone number, fax number, and date it. Also, you need to provide the seller some sort of disclosure stating that you are not held responsible if the property forecloses.
3. Get the warrenty deed signed to you and meet the client to get it signed to you and notarized.
4. Get a purchase and sale agreement.
You need to decide what you are going to do with the house after you have it. The investor stated getting at least 2 purchase and sale agreements here- one with the sub2 stuff (for after your purchase?) and one with her signature only, the rest is blank so if you need to counter-offer the bank, you have a sale agreement already signed by the seller and you don't have to hunt her down and waste more time.
4. Fax this to the bank. it takes 24-48 hrs to get it in their system. It then goes to loss mitigation (he said Ameriquest now calls this "home retention"
5. You are offering all cash so you need your financing in place. A HML will come in good here if you are prepared and your numbers are right (purchase price, holding fees, fix up costs, closing costs...)
6. After you get short sale pack, meet with the seller and get a hardship letter- events that led to this situation(pre foreclosure)...ask seller to include something like "Please work with my investors, I am trying to avoid bankruptcy". You will need to provide sellers pay check stubs- if she is not working, there are none. W2s, tax returns...
7. The bank will want a HUD 1 or net to seller form. It is VERY important the seller receives NO money from the sell!! Bank will want pre-approval letter of funds or tell them cash investor with private funds. He uses Ron Legrande Form- sales price=offer price, 'contingent upon lender accepting __ as sales price'. Include ugly photos, contractors estimate, letter of intent, 'it's my sincere desire you find my offer acceptable', "Fax cover letter for letter of intent,'I want to pay off the loan here is the amount to net the bank, seller is to receive NO compensation, funding of this sale is private funds'.
8. If bank accepts, get letter of acceptance and take to title co. (I think)
There are a lot of other factors too. They may try a forebearence. It is all different if there is 2 loans. Some smaller banks my just let you buy the note.
There is a lot to consider here and I know what I stated is just to get you familiar with how it works. I assume you have worked with foreclosures before so you may know some of this.
Will other investors on this site state right or wrong or this may be how Texas does it?
IT IS ONLY WHAT I HEARD AND LEARNED.
I hope this at least helps you make the decision about what to do.
The only way I see this deal working is if the bank will short the mortgage at least 20-25%. When you do this try to get the bank not to seek recourse against the homeowner for the amount of discount of the short sale. If you have good credit you may be able you negotiate a lower interest mortgage.
Wow when you need help all you have to do is asked. Thank you....
With that said is there enough time? Sale date is set for Feb 23. There appears to be a lot of paper work. Thank you again.
I'd allow for 3-4 weeks for a short sale. I'm not saying it can't be done in less. It's worth a try right?
Ryan J. Schnabel
yep, get the authorization to speak on the loan, from the owner (i do this with a 3-way call) and ask right then for a short sale package to be sent to you immediately.
in my experience with ameriquest, they're pretty lenient with what they require for an offer. usually all they're interested in is thier bottom line figure - so a HUD-1 will suffice .. sometimes even just a standard purchase and sale agreement with thier bottom line figure highlighted. you're right, ameriquest doesn't want to foreclose, so pursue this and you may make out well.
good luck!
Remember that the bank does not own the house... just the note on the house.
1.get an "authorasation to release" from the owner.
2. sales contract for half of the debt.
3. realy bad pictures of repair jobs needed with estamated costs.
4. contact an fax all of these info to the loss midagation dept.
5. loss midagation will conter at 90% fmv you conter 65% they 85% you 70% and maybe settle for 80%
6. put new refinancing to take take advantage of a lower rate of interest.
Remember that banks give discounts all the time. And at public sales they migth come out lossing. So BINGO you made 20% profit. DO ALL OF THIS BY PHONE & FAX.
let me know how it work out **Please See My Profile**
[addsig]
Thanks again to everyone. I have been having a very hard time getting anyone to talk to me at Ameriquest. Had contact numbers from owners called those people left messages tride the 800 number got bounced around and voice mail after voice mail.
Should I be shooting for 80% of as is value or 80% of FMV? FMV is top 135 low 120. As is needs carpet, holes in walls fixed, bedroom doors have holes in them and trim work needs to be fixed as is (top of my head) would say top 110. So should I offer 88,000?
Thanks for the help. I hope this works.
I agree with Michael see if the bank will short the sale price and let that be your pocket money if not I would look for a better deal.
Well bad news on this deal. Amerquest won't stop the sale what so ever this close to sell date. Caseycat, they told me they will not deal with "friends" must be an investor with no ties. No biggy just wish I could help them but they are way to upside down and there is just not enough time. Wish they would have called me in Dec when they got my letter.
Good news as I was typing this post phone ran have another appointment not behind just making 2 house payments and need out fast. So every cloud has a silver lining.
James