Bank Has Requested an LOI

[Jarrod Weaver]

I have been working on purchasing a property for 6+ months which has been stuck in foreclosure limbo for 2½ years. The owners are deceased and the heirs wanted no part of it. They actually signed affidavits with the bank's attorney releasing their claim to the property. This is where the process stalled. The bank didn't move forward with the foreclosure and the servicing company continued to send statements, maintenance bills, and compulsory insurance.

Eventually, I found the father of the deceased and established a contract with him trying to get my foot in the door for a short sale. A copy of the contract was sent to the bank's attorney who forwarded it to the servicer and bank holding the note. Not too long after I was contacted by the bank and told that my contract was worthless, since the person with whom the contract was entered had no legal standing with the property.

Initially the bank's representative said the might consider selling me the note. Although I have never done this yet, I am certainly interested in doing so. She said that it had to go to committee for approval and it could be up to 120 before a response would be issued.

Last week she sent another message apologizing that the bank would not consider selling the deed and was going to complete the foreclosure. She encouraged me to participate in the trustee auction on the courthouse steps.

Frustrated, I backed off for a few days but kept thinking about the house more and more. Yesterday I read through a large chunk of this forum and decided to send another message to see if they would reconsider their position.

Today she suggested that I send a Letter Of Intent that she can take to the committee. I have also been in conversation with the agent contracted to provide the bank with a fresh BPO - which I will have a copy of later today.

Can any of the experienced note investors share what action steps I need to take to make this successful? I'm most grateful for your time and assistance.

[Bruce Lynn]

Wait for the foreclosure auction......let them foreclose....it will help you clear up the title.

Looks like at this point you don't know who the legal heirs are.  That can be a mess and expensive to find out.   Had one about a year ago that had over 20 different people who had to sign affidavits in front of a notary....you might have to pay and send the notary out to get people to sign off....or have a pool party and offer everyone $50 to come in and sign.

Is there something special about the property?  Why is this one so special?

Chances are they get it back at the foreclosure auction....or you buy it....if they get it back, then looks like you are talking with the right person to make your offer before they put it on the market as REO. You're ahead of the game with a small bank like this, that sounds like they don't have a lot of default experience.