Pre foreclosure perspective/tips or short sale

[Jeff Silver]

Hey BP fam!

Here’s the Situation:

Looking for a home to live in. Found a pre foreclosure that is 2 years behind and still hasn’t gone to auction. No agent involved.

I spoke with the bank handling the loan and got all the details. Balance, fees, neg escrow, principal balance:

Past Due 33,900 past due.

Principle $130,722.00

Neg escrow $8,700.00

Fees $5,067.00

$156,500 is total they said they can get a pay off letter so I can provide to my lender. I’m fully qualified and ready to go.

Market value on the Property is about $215k.

I would be happy with the 156k and close it out. Auction date is November 28th.

Any recommendations about the negotiating a lower price like the fees removed and negative escrow etc.

Do I ask the lender about short sale options or will that derail and delay the already discounted property with a close auction date.

**OR**

Should I figure a way to arrange payment assistance with the seller and the bank to stop the foreclosure and take the property subject to?

Any tips or suggestions would be much appreciated

Thanks

[Ron S.]

Based on what you wrote, anything short of showing up to the auction on the 28th with cash, is a waste of time.

I think you have things wrong though. The lender is not "negotiating" anything. They are not discounting anything. They don't own it! How you are getting the information from the lender is another question but regardless, the borrower owns it. All negotiation happens with the borrower. If you can't negotiate and close the deal before the 28th, you don't have a deal and the lender has no reason to stall the sale whatsoever. No lender is negotiating with a buyer on a property the lender doesn't own. That may be what you think is going on, but i assure you, that isn't what's going on. Lenders are federally regulated. The FDIC looks at foreclosures and REO every exam. The FDIC would love to catch a lender selling a property they don't own.

If you do it by paying the arrears, better not put that property into your name or you face the accusation of equity skimming. If you pay the arrears and don't put the property into your name, better trust the borrower more than you trust anything else if you value your money because you have nothing else to protect you in the event the borrower defaults...again.

$178,389 is the amount owed on a $215,000 property. The bank knows it, you know it. That's what its going to auction for in that state, or more. That amount goes up daily with interest.