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Updated 4 months ago, 07/31/2024

User Stats

96
Posts
23
Votes
Joe Henry
  • Web Developer, Real Estate Investor
  • Jacksonville, FL
23
Votes |
96
Posts

Unusual situation - need help selling a property back to the bank

Joe Henry
  • Web Developer, Real Estate Investor
  • Jacksonville, FL
Posted

I'll make a long story as short as possible:

> House built in 2008, first owners used husbands VA loan to secure (220k loan), stopped paying HOA and bank shortly thereafter (current payoff 500k+). SCRA protections prevented bank and HOA from foreclosing.
> Owners had several kids, divorced, moved out. Tax appraiser accidentally removed the husband from title around 2022, HOA then foreclosed (Florida, HOA can foreclose and first mortgage lien will remain in tact).
> I purchased property from HOA foreclosure auction last year for 40k, not realizing first mortgage cloud (silly, I know).
> Bank is still paying property taxes of 5k a year, and I assume insurance.
> Prior owners want nothing to do with the property, I'm unable to structure any kind of deal with them, or fix issue of husband being removed from title, or undo foreclosure auction (thoroughly checked with attorney).

Recently discovered repairs needed totaling 20-40k which I cannot finance. So my last idea is to sell the property back to the bank - 

The bank cannot foreclose on the house due to husband's military SCRA protections. He just remarried and got another house using new wife's VA loan, has child support to pay for another 10 years, and has been active duty since 2004. The chances the bank will get to foreclose on this house in the next 10 years are next to 0. The note has already stood unpaid for 10 years.

I am hoping the bank may be interested in buying the property from me so they can re-sell it with a clear title. Otherwise they will continue to pay yearly taxes and maintenance costs, and not be able to foreclose the property as it will sit here leaking and falling apart and the mold continuing to spread. The prior owner, the husband, has told me the bank does not plan to pursue a deficiency against him when they do eventually foreclose. So the bank is not getting their money any way you cut it.

My question is how do I get the ball rolling on this? Who would I talk to at the bank - underwriter? servicer? etc... are there professionals who specialize in this sort of deal, talking to the bank, etc... a realtor or lawyer or someone with the right connections to the bank? 

I'd be happy to come out of the deal with the 40k I paid for the property, the bank could sell it in the current market for close to 200k, and a flipper would still be able to make money on it after repairs. 

P.S. I'd like to keep this thread centered around the bank deal. If you have other ideas or questions, I've a previous post about this property here when i was exploring other options: https://www.biggerpockets.com/forums/41/topics/1163859-hoa-f...

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