One in a Million – Bank Forgives Sig Loan Amount – Own Free Clear

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  • Hello:

    Any advice sincerely appreciated. Listed below is summary.

    – Fire 9 Mos ago fire happened – bank had forced place insurance in place – 1st Forgive Loan in Full, high val neighborhood, bank pays itself with fire proceeds to settle. Now own burnt prop free/clear.
    – 2nd Settles for low amount, payoff done.
    – Land Value $60k, rebilt – FMV – $300k, fix up approx $100k. Build out city, no real vacant land to develop, affluent area.
    – Hours (14 hrs) before final signed contract for pmt “as is” (signed days ago) – & no days of changing mind (accepted seller-as is), zero date of recission, buyer claims issue with trusses, need to inspect further (after month of talking/inspecting), claimed did inspection (buyer) again; sd could fix roof, not replace. House = 2.8k sq ft
    – Had two contractors bid on rebuild – while bank was still saying wants to fix home via insurance vs clear loan (etrade/countrywide/bofa)
    – spoke (& email) with buyer attorney & buyer twice day prior to deal scheduled – received email at 8:30 saying did another inspection w/ contracter. Buyer want to have city inspector to confirm if need to have roof completely replaced or can fix w/out replacement ….per all previous talks, email, agreement.
    – asked how he got in – sd picked lock and have lock box and working key on back of home.

    Bottom line:
    Would you place home in land trust and are there options/recomendations to make home have a “amount due” which would still be true…… to make it less paletable to “gold diggers”? If yes, any examples of forms would be Great :)
    – Code enforcement saying need to board open areas and paint boards (mid june) to match house – areas are……….except paint and one area…to be boarded are done.Fix due in 1.5 weeks, per code enforcement.
    – Renters moved out after fire (end of Dec), never returned keys, sent cancel of month to month lease, etc.
    – Would it be potentially good/bad to let code enforcement know (home in Trust vs Personal) bank decided not to repair prop so can repay itself from fire proceeds? Just finalized recently…days ago…….
    – Good or bad (in general) to put add up for highest bidder before…… (if good option) – before putting home in land trust?
    – In general – any ideas / recommendations for ideas I didn’t have would be sincerely appreciated.
    – Finally almost out of 5 yr black hole………..

    Thank you for any advice/help.

    Sincerely :)

    It’s WAY past the time for a Land Trust. Suggest you do a Highest Bidder sale and sale AS IS WHERE IS to highest bidder

    you absolutely need to provide a property inspection report and a copy of all code violation reports at the HBS so buyers can make an informed decision.

    get rid of this albotross — it is taking up all your time that you could be doing something more productive

    Thank you, I wasn’t sure if it was worth while to put in a land trust until the highest bidder sale, since its still has a value.

    I called code enforcement to see if they would come out to just look at the Trusses to see if all of them need to be replaced or just the ones in the garage where the fire was contained. Code enforcement said a contractor or inspector would be able to do that.

    I have a 2 “bids” from a contractor from when the home would still be possible covered by insurance (prior to bank forgiving loans) and they listed EVerything to get it fixed, same with the 2nd contractor. I’m hesitant to ask them to look at it again since they know the previous tenants and don’t want any hasstle from them trying to look for a payday even though my lease said they need to get fire hazard insurance. Turns out these two groups know the code enforcement as well, so not sure if it would be a bad idea or not if they looked at it again in hopes of the buyer choosing them to do the work; at the buyers choice of course.

    2nd Contractor had said the roof could be fixed and not need to be replaced, but still came in withing a few dollars of the insurance amount, when that was an option. Thank you for your advice.




    In Texas, with a fire damage house, if the wood shows any signs of being charred, it has to be replaced. The electrical and plumbing has to be replaced too. Code enforcement will demand a lot of extra things have to be done before they will issue a certificate of occupancy again.

    Even when it is all fixed up, it is very hard to sell a firedamaged house. There is a bad omen about them.

    Suggest you stop grasping at straws about wheter one truss needs to be replaced or not and just get rid of this house. It has taken up a year of your life and you need to move on so you can take advantages of opportunities which are all around you.

    do a highest bidder sale next weekend and TAKE the highest bid

    wish I had read this before the call tonight. I’m in a similar situation. No responses to my CL ad to sell the lot as is. I’m going to move ahead with the highest bidder sale.

    Hi Jackie:

    Thank you, sorry for the slow response…..I was rear ended by a truck this week and family member had a E.R. visit, last week.

    I have a bit of a good problem now :) Already promised (A – below) the deal today, but (B) ends up spending all day at property and calls around 2 pm and says they’ll pay cash “saturday or monday” and pay $5k more.

    A. Contractor company put in “as-is” contract yesterday, due today and have 2 weeks for inspection of property.

    B. Invester – says they’ll pay cash tomorrow for home, but subject to clear title.

    1) I have a letter from mortgage co that the lien is satisfied. Its just not in public records yet. Bayview home loans (servicing of BofA) said again today that everything is satisfied in full. Should I include any verbiage in the contract because of situation?

    2) How would you have the check made out? I’m trying to do modification on my home and it won’t happen if they see a big check and I need to repay parents for a loan.

    Could I record a land trust, then have the check made out to that entity as an option?



    It’s too late for the land trust.

    Have your parents put a lien on the property for their loan, then the proceeds will LEGALLY go to your parents.

    If would be loan fraud if the money goes to you and you do not disclose disclose disclose. Loan fraud is jail time so you don’t want to go there.

    creative real estate does NOT mean that you would ever do anything against the law.

    Agree 100%, intent was definately not to do anything wrong. Wasn’t sure what could do or not. Thank you for the advice :)

    Side note
    – Highest bidder – Jackie & Miller way worked :) Ended up getting two other good offers, plus one low ball offer.

    Any general advice from member’s would be great. Concerened about signed “as is” with 1st buyer weeks ago.

    1. Signed “as is” with previous buyer on 5/25/12 & emailed copy to them. Never received dated/signed copy from buyer. Was supposed to close a few days after emailing agreement, per emails/phone calls. They put “zero” down in escrow, per agreement (newbie mistake)
    2. Received email from buyer on 6/5/12 from buyer, day before planned (email confirmation) closing at 8:30 pm – saying – repairs too much, putting deal on hold until determine what county will require to fix home. Client verbally said can’t do orig agreed price because repairs to much – & via email – said – waiting on figuring out what county will require to fix home & will provide update.
    3. Closing date on “as is form” said closing docs would be delivered on 7/1/2012, at the latest
    4. Buyer “per terms” paid for all out of pocket expenses other than any water or HOA liens (not much)
    5. I left messages for buyer saying if don’t hear back, I’ll assume contract is canceled today – if don’t receive a returned call today….additionally ………I had sent email’s asking for returned calls prior to today….. No returned call/email.

    Buyers sep from above:
    New Buyer(s) – Buyer (B), outbid buyer (A) and came to table with (basically) (Jackie/Miller form) – ie short and to the point (1 pg) – 3 days to close, cash if can’t get free clear title, & outbid buyer (A) – vs – less $ and 14 days to close vs 3 days and no inspection clauses at all….they spend 1.5 days in home inspecting on (thurs/fri).

    Bottom line – (generally – since I didn’t provide copy of basic “as-is” agreement” here to review……
    Would you worry about 1st buyer if (they had zero escrowed)…. I never received signed copy of “as-is offer”. Bidder said via email/verbally *(6/5/12) waiting on final numbers for repairs b/c they seem major and allot more than expected. And that they’d “let me know” update (weeks ago). They also said – putting deal on hold (via email)…which was 1/2 day prior to email/verbal agreed closing…even though closing date on form said (7/1/12)



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