Foreclosing on A Hard Money Loan
Back in January a very reputable and trusted RE agent referred another investor to me for a short term loan. Never done a loan before and I'm sure I made mistakes. I did my due diligence with title work, wrote up a promissory note and recorded a 1st position, only position mortgage. I was pretty happy at that point with 5 points and 15% all documented and recorded.
Then I found out about the nasty divorce taking place and the father-n-law who actually loaned all the money to buy and rehab the subject property. Now she's got her divorce attorney, he's got his divorce attorney and I've got my attorney. Poor father-n-law keeps calling me for advice because he put up his residence to fund this deal to begin with.
Looks like I'll be foreclosing and sitting pretty nice when all is done but I'm feeling for that father-n-law. I'd love to hear any advice or thoughts on this matter.
Comments (3)
Update: Sherriffs sale is on August 25th, I've talked to the father n law and recommended that he get a loan to buy me out.
Dick Rosen, almost 15 years ago
This is an all too familiar scenario but, since you filed you 1st position at the courthouse, you're covered. You're right about the poor father-in-law but it sounds like emotion did the better part of his financial forethought. Goof luck on your foreclosure, hope it goes well for you - too bad about pops but he's the one at risk here.
Emmett Dixson, about 15 years ago
Dick - I can't really give you any advice here other than to protect your interests first and foremost. It sounds like a crappy situation, but in the real estate business, this type of thing happens all the time. Landlords will eventually evict. Lenders will eventually foreclose. You can't let other people's problems affect how you run the business, or you'll quickly get overwhelmed and get little done. Good luck and keep us posted as to how things end up.
Joshua Dorkin, about 15 years ago