All Forum Posts by: Jeff Silver

My brothers and I have a property we own tenants in common. This was given to us from family and it intended to set it up as joint tenancy so as the brothers died it would end up with one person owning.

My older brother passed without a will or any estate planning. My younger brother wants nothing to do with the property and I purchased his portion 1/3 from him.
my older brother‘s wife stands to get the property remaining 1/3 into her name but wants to give it to her two sons.

Owning property three ways has wreaked havoc in our families between my brothers and I. Now my sister-in-law with the two sons wants to give the 1/3 to them but the obstacles and challenges we’ve had is splitting costs and taxes or paying any money for renovations. The property definitely needs major updates. I also have a child who I plan to give my portion of the property too but that puts us back in square one with three separate people owning the property and in unequal amounts.

any thoughts or suggestions. I offered to buy the portion off of the two sons who I’m very close with and would never prevent them from enjoying the property but my thoughts are to simplify give them money so they get something out of the property that was their dad‘s and still allow them to enjoy visiting the property but without any of the headache of future payments to taxes and repairs etc.

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@Ron S.

Points taken. I would be able to pay the amount if due on sale was enforced and called due.

156k is the total. I listed 215k as market value.

Either way. Thanks for you input. I don’t take any cautions lightly.

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Originally posted by @Boris Portnov:

It's not a short sale if there's equity in the deal. Lenders send appraisers out to the property to verify value. Also the seller is not allowed to profit from a short sale. Will the seller cooperate? Sometimes a seller may receive a small relocation assistance.

Yes, really wants to move and get on with new living arrangement. Going to help relocate and move into new place.

A subject to deal maybe a viable option if the loan has favorable terms. Bear in mind today's loan terms are very favorable and you would be ineligible to refinance. Run your numbers whether the lost opportunity costs due to a higher interest rate would be offset by some instantaneous equity in the deal. 1% drop in rates can offset upwards of 10% in equity.

Good points. Thanks

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Originally posted by @Justin Hammond:

@Jeff Silver, if the seller goes through a loan modification then why would they need to sell to you? Are you working directly with seller?

I’m not certain it would even be possible to do a modification. Yes, I’m working directly with the seller. Initially, she thought it was only months behind and when we discussed catching it up and taking over payments. Her husband died and lost that income not sure how much was lost. She is getting older and wants to live with family and the house is bigger than what she wants.

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UPDATE: The lender told me they are going to send the seller a packet with paperwork that could get the loan back on track and apparently the rep I talked to misspoke and no auction date has been set.

Thoughts on helping the seller get other payment arrangements set up with the bank that wouldn't require those full back payments due and then take sub2 as long as those arrangements pull it out of the foreclosure process.

Or at least get it out of the foreclosure status and take subject to

Thanks,

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Originally posted by @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.

You are correct. The borrower called and gave me auth to talk to them about them abou the loan. I asked them how we would close on this property and they told me I would go to closing with them (the lender) confused me.

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.

I would for sure title the property in my name if we moved forward.

$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.

Please explain the $178,389. My replies are above in bold. Thank you for the reply

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@Brett Goldsmith all great points and thank you! You are right.. the downpayment is much less than catching up on the past due and fees.

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Originally posted by @Mitch Messer:

Hey @Jeff Silver, congratulations on working this potential opportunity!

There are still some factors you'll need to know before this qualifies as a deal:

What are the repairs that would be needed to bring the property in line with comparables selling at 215K? Borrowers who don't pay their mortgage often don't have the funds to maintain the property. Expect significant deferred maintenance, not to mention total degradation of the major systems (electrical, plumbing, HVAC, roof, etc.).
The house seems to be in good condtion. Thinking I will get an inspection.
What are the terms (payment, interest rate, duration, etc.) of the underlying mortgage? If you are prepared to get a new loan anyway, you'd be far better served purchasing subject-to provided you can live with these existing terms.
The terms are something that can for sure be lived with.. subject to would be preferred but back payments are the obstacle.
If there is truly significant equity in the deal, a short-sale is likely a non-starter. The bank will (eventually) just foreclose and make themselves whole.
If there is truly significant equity in the deal, the seller is probably going to want some. Have they actually agreed to sell for exactly what they owe?
We have agreement but nothing signed.. Just want to be done with property and move on and live with family for many reasons.

Good luck and let us know how we can help!

Much appreciated! I'm trying to explore the options to get the loan into a position to take sub2

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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

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@Mike M.

It's already at a great interest rate. Why refinance at all? It will take years to make up for the cost of the refi.

-Leverage the extra cash

Did you Quit Claim your LLC onto Title?

Did you use a Warranty Deed?

Did you close through Escrow with Title Insurance? ✅

Was the loan in pre-foreclosure? No

Are you using a newly minted loan officer that hasn't been doing this very long? Probably. I’m not sure.

There are two components to a property with a loan (lien) against it.

1. Who owns the property (Is the seller still on Title as well as your LLC?) I own the LLC. LLC Is only on title.

2. Whose name(s) is on the loan. (Clearly the seller would still be on the loan) seller only.

They are very different things. I have NOT heard of a lender (I used to be a loan officer) that would knowingly

a. Lenders won't lend against a property using someone's name and credit who doesn't have ownership

b. Lenders won't lend to an LLC that hasn't established credit unless it is a (HML) Hard Money Lender doing an equity loan (you don't need the seller's involvement for that)

The seller called the VA to talk to them about getting a new loan. They referred him to a VA approved lender. He talked to that lender and said they could refi after seeing the LLC on title.

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All Forum Posts by: Jeff Silver

Jeff Silver has started 8 posts and replied 32 times.

Post: Family and future family

Post: Pre foreclosure perspective/tips or short sale

Post: Pre foreclosure perspective/tips or short sale

Post: Pre foreclosure perspective/tips or short sale

Post: Pre foreclosure perspective/tips or short sale

Post: Pre foreclosure perspective/tips or short sale

Post: Pre foreclosure perspective/tips or short sale

Post: Pre foreclosure perspective/tips or short sale

Post: Pre foreclosure perspective/tips or short sale

Post: Subject to Refinance