All Forum Posts by: Account Closed

 No worries. It's been several years, & much too long for me to remember (or care too much) about all of the details on multiple loans that are delinquent and have been modified and then foreclosed. ;-)  Thankfully, I really don't deal with those any longer. But, thanks for the sanity check. I wanted OP to get his answer and you two have provided that.

@Ron S. When I was doing loan modifications, all of the major banks required a subordination agreement from the second since the first (Wells Fargo, Chase, etc) would not allow the arrears on their note to be placed in 3rd position for obvious reasons.

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@Dana Haas Find the ARV and mark it up a minimum of 5% - 10% So, if ARV is $250,000 sell it on a Wrap for $265,000 - $275,00 and take $25,000 for the down. General figures. It is market specific of course and you want to price it to what the market will bear. Remember, they don't have to go to the bank and qualify so they are willing to pay more for that privilege and ease.

@Taylor Ernster 

I'm a little rusty but I'll give it a shot. 

Yes, a subordination agreement would be used in the event a borrower fell behind on a 1st position lien and did a loan modification. The 1st would then effectively have two liens. The 1st would demand to stay in the 1st position on the remaining principal of the 1st loan. 

Then the 1st would require that the 2nd lien allow the "arrears" (say the borrower was behind on the 1st lien for $1000 per payment for $10,000 or ten payments) that $10,000 would "slip in" between the 1st lien and the 2nd lien, itself becoming the 2nd lien. That pushes the original 2nd lien to 3rd position.

But the second would have to allow that in writing (called a subordination.) The alternative is for the 2nd to say "no" and for the 1st to say "ok, I will take the property to foreclosure to collect as much as I can and you, Mr. 2nd position can have whatever is left over, if anything.

The subordination and loan modification "rewrite the agreements", thusly the new order and the new dates.

The lis pendens means there was a lawsuit.

The judgment filed in Jan 2017 looks like the borrower lost the suit and owes $84,905.88

That can mean that there was a deficiency judgment on the sale of the property. If the property sold at foreclosure, I wouldn't know the property could secure the debt any longer. That judgment is likely against the borrower.

I don't know if this is exactly what happened but it is *one* likely scenario. Without seeing the paperwork, it is difficult to know exactly what went on and who won against whom and the type of legal action that was taken.

@Jenna Hintz I am pleased that you and your husband do flips together. My lovely wife of nearly 40 years and I have always done them together and we enjoy flipping as much as anyone can. All we did for the first 15 years was flips (Using Subject To to purchase them). I can wire to code and I can plumb to code. I don't do roofs ;-) But, my point is profit vs risk. We enjoy the tremendous cash flow without the hassles of tenants and their dramas. Yes, you will have drama at some point with a tenant or two. Everybody does. But, you should do what you enjoy most. And there is *great* satisfaction in a well flipped house.

@Stu Basham I might be able to help. Send me a colleague request and PM me with this post if you wish further info.

 That's a good point. I'm sure I will feel much better in the future when my dumpy little L.A. house's property taxes drop from three times as expensive as my Tempe house, to only twice as expensive. ;-)

@Account Closed

Just for the "ah shucks" of it I captured relative property taxes for a roughly $309,000 house in each of Seattle, Los Angeles and Phoenix - Assuming properties are roughly the same value and assuming property taxes are based on a set percentage of that value. Yes, rates adjust sometimes after a property is sold but these properties are active in their respective MLS's today. This is not scientific, but it is enlightening. Prices in that range were hard to find in L.A. & Seattle, but were abundant in Tempe

Asking Price about $305,000 - $325,000

SEATTLE:                Bad neighborhood and small house. Prop Tax $4,188 per year

LOS ANGELES:      Bad neighborhood and small house. Prop Tax $3,876 per year

TEMPE (Phoenix): Good neighborhood and 3X house.    Prop Tax $1,476 per year

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SEATTLE: Bad neighborhood and small house. Prop Tax $4,188 per year

LOS ANGELES: Bad neighborhood and small house. Prop Tax $3,876 per year

TEMPE (Phoenix): Good neighborhood and 3X house. Prop Tax $1,476 per year

Your comment: "The bank will seek judgement for the mortgage owed and there won't be any assets to sell off."

Actually, in Subject To, only title changes hands, the bank still has the lien against the property and can call the DOS and proceed with foreclosure recovering their investment (loan.) There is no change in the bank's standing.