SS On FHA In Bk13 With A Few Twists To Keep It Interesting
I've been working through a situation in another Forum, and it's time to bring up the SS specifics here:
Background:
I'm currently living in a house with my gf. The mortgage is in her name, and is FHA. She was 8 payments behind when the mortgage company began foreclosure, at which point she filed for bk13. She is set to make her first payment on the bk this month.
She would like to move to a smaller place with lower bills and less upkeep, and I am thinking about staying as I have put a great deal of work into the house and would hate to lose it.
So... it has been brought to my attention that this may be a good candidate for SS. I do not have concrete figures for everything yet, but here's what I do know:
ARV=$140k (conservative)
PITI= $950
Loan balance=$125
The appraisal the mortgage company has is a couple of years old and says $130k (If that matters)
It needs new flooring throughout (bare cement floors in some rooms, badly pet-stained carpet in others... Floors were next on our list when we both lost our incomes. It also has large holes in the yard, very poor grass, etc. and needs a new AC, dishwasher, etc.
Overall, for repairs necessary to sell retail, I'd say it would cost at least $7k. Additionally, it has been brought to my attention that I may be able to file a mechanic's lean for the unpaid work I have put in (painting, light electrical, landscaping, etc.) I am still unclear as to a few legal issues there, and wheter such a lien in FL would be sr or jr to the mortgage. All in all, I would think there's at least another $7k-$9k worth of work that could go on such a lien... unless you know something I don't, in which case, please share.
Now, I'm sure there will be twists and turns here, along with different opinions, but I'm trying to figure out a gameplan. I don't expect it to be easy as my income is unverifiable, I won't be able to put much down, and my credit is in the midst of repair. As to how I would fund, I am certainly open to suggestions.
My first thought is to try to find a stated income loan that loans based on ARV, and to short enough to make the spread. (Utilizing mechanic's lien and state of disrepair for leverage if possible)... still trying to figure out how to get the items fixed, though. Let's say I'm able to refi at a better rate in 6 mos... in the meantime, will I be able to get a second (HELOC or similar) to pull out the funds for repair?
Again... I'm open to other ideas here, I'm just trying to think it through.
Remember too, she's currently in BK13, but hasn't made payments yet, so I'm wondering too if I take too long putting this together (while I pull $ and my credit together) if I will be hurting my chances of the short because she makes on-time payments to the trustee. One thought there is that when she tried to deal with the mortgage company before filing, they rejected her proposal because they said she didn't make enough.
Apparently, the court felt otherwise... I only mention this because I'm wondering if the fact that they came to that conclusion already will help in me convincing them that they are going to lose out here anyway, so they might as well take the fast $.
Whew... that was a lot... sorry. Any other info needed, other perspectives? Next steps? All input is appreciated.
"Remember too, she's currently in BK13"
You won't be doing much of anything while she is in bankruptcy.... She doesn't have the capacity to sell without Trustee's permission. The mortgagee won't consider a short sale while she is in bankruptcy.
[addsig]
Yes, I was under the impression I'd have to get the trustee to release it. Is there any reason why the mortgage company wouldn't come to terms contigent on her getting it released?
I'm assuming that if she wanted it released, and had a buyer lined up that the trustee would have no reason not to cooperate, and if the mortgage company needs it to be released for whatever reason, then that should be easily enough arranged... Of course, she won't release it until she knows the sale will go through, so how does one get around this Mexican standoff?
... or is there anything I'm missing about the BK process? I'm assuming that if she drops the bk or has the trustee pull the mortgage out that she's lost her protection and could just be kicked out in forclosure, correct?[ Edited by thestudentisready on Date 05/21/2004 ]
Sorry, I can't say it any plainer than I've already responded.
OK, I understand the stance of the mortgage company and the court, but the overall question remains...
... does that mean I just give up? Like I said, I don't have all the answers, I'm just looking for possible solutions. The only reason I'm even talking about a ss is because I was told on this board that may be the way to go.
If there's something else I should be doing, then that's what I want to find out about. If the ss is a good possibility, but she needs to get the trustee to release, then that MAY be fine too, I see no reason for the trustee to fight it, so it's a matter of figuring out what the reprocussions are for the seller to do that....
... which I don't know...
... which is why I'm asking...