Preforeclosure Help!!!

[Kevin Lovill]

I was just informed of a property from my brother-n-law that's in pre-foreclosure. The owner has not listed the property and is willing to let it go to foreclosure. I have an appointment with him. When I meet with him I don't want to sound like this is my first experience with a pre-foreclosure. How would I approach this transaction. Would the homeowner need to give signed consent for the bank to release information about this property to me. The purchase price was 139,000 in 2004. Comps for the same square footage are around 150k, recent comps. I not sure if I make the offer to the homeowner or the bank. At this point I'm assuming it's not a short sale. Would the bank determine the value from comps or the payoff. What the best way to negotiate the deal. Thanks for any advise. Wait one last question if I negotiate a deal less than the balance does the homeowner responsible for the balance and will the bank approve it, thanks again.

[Calvin N.]

krlovill, If you are going to purchase it directly from the homeowner you will not need to discuss it with the bank. However, if the owner sells it to you for less than what they owe they will be responsible for the remaining balance to the bank on their mortgage at the time of closing.

If you are wanting to purchase it as a short sale you will need the owner to sign a statement allowing you to contact the bank for information about the loan. Then you get into the fun part of negotiating with the bank. The owner would need a hardship letter that they present to the bank explaining why they will not be able to keep the house and why selling it to you is the best option.

Are you looking to purchase this for your own residence or for an investment? It does not appear to be that great of a deal if the comps are only 150K and they owe approximately 139K. Keep us posted on what you find out.