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I generally work with properties under distress, get an option and wholesale. I found a house with over grown grass and vacant over one year now. I finally got in touch with owner and she stated that the house may be in foreclosure. She declared bankruptcy and the mortgage was “dismissed” in January 2011. She been out of the house since and knows nothing else. She gave me a phone number to last known lender. She owed 225k and house is worth 150k. Is there anything I can do to salvage a deal?
It’s probably not worth the hassle but you need to
determine if there is a foreclosure started or if the lender already owns the house
if not, you could do a highest bidder sale subject to a SHORT SALE
but the seller would need to be super cooperative by providing tax returns, bank statements, and letters explaining why the short sale is justifiedif the seller does not want to be involved, there is nothing you can do
I spoke to The Mortgage Law Firm this morning and they stated that they indeed are only trustees to service the forclosure. They also informed me that the bank (New York Mello) will not sell any of their notes. Also, there is no foreclosure date set and they have no idea when one will come. In some cases I’ve heard of homes sitting for 2-3 years before the bank will sell at auction. It’s been ten months on this house. The attorney also mentioned that the only possible deal would be a short negotiation between the owner and bank.
So here’s what I’m thinking and need assistance with;
What if I secure a master lease with the owner, allowing me to sublease the property while we start on the short sale process. Thus, in the mean time I can collect cash flow from rents on a month to month term. Then at the end, if short sale is approved, I can buy from the owner and sell to an end buyer. But what about her BK? How will that affect anything? I thought that when a mortgage is discharged becacause of BK, the bank get’s the house? Can an owner short sale if they filed chapter 13?If the seller will give you a quit claim deed you may be able to possess the house legally to rent out, or Highest Bidder sale, but if the bank has secured the property you might be considered trespassing. If the Mortgage was voided the Note might still be in force unless that was dismissed. If the Mortgage is still
valid that gives the lender rights to the house, but it sounds like time is on your side. Good luck.MAC
Mac,
That was my next thought… If I can offer the owner a small cash token and get a quit claim, then I can collect rent. I am not sure if the bank has secured any interested in the property. The owner still holds title and trustee for the bank told me that there isn’t a sale date. In many cases when a bank “owns” a home (REO) the bank will at least hire a lawn or home cleaning service to maintain the property. This isn’t so on this house. So I do wonder if a quit claim will give some me leverage as when foreclosure starts, I can negotiate the short sale on my own since I’ll hold the deed. What do you think?
STOP!
It’s called equity skimming when you collect rents and are not making payments on the underlying loan. You can go to JAIL for this.
Sounds like the seller has washed their hands of the whole mess and will not be cooperative with a short sale. They have to be on board for it to work. Plus, if the seller has assets (money in the bank) it will probably not be approved.
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