All Forum Posts by: Martha Blumel

Thanks @Brett Goldsmith. Yes, a short sale is the likely outcome. He just had someone approach him 5 months ago offering to pay him money for a QCD, which makes NO sense to me what so ever. After not paying for 9 years, he owes twice as much as it's worth and lord only knows how much his code violations are.  So now he is telling me he'd be happy to do a QCD with me. Theoretically... that is great, but now his problem is my problem.  Unless there is something I don't know.  Which is most likely! 

This property that I am working to purchase is getting more and more complicated as it goes on. I hope someone has some insight!  His bank has been hounding him for some time now and is close to filing a LP. That is why I posted here.

Long story short (as I can make it)... I am in the process of trying to buy a vacant rental property and the owner filed Chapter 13 BK in 2007 and it was discharged in 2012. Without getting into too much detail, I am beginning to think that the bank may have messed up. So my question is what exactly happens to a rental property house that was surrendered in Ch 13 BK. The Bank never pursued anything and 9 years later it is still in the owner's name. He has not made payments in 9 yrs and there is no LP on it.

The paperwork that Select Portfolio Servicing sent him has the wrong address. It's a weird property with two duplexes. The address they list IS on one of the duplexes, but it is not the legal address for that entire property. (Make sense?) And they are saying that his wife is not on the note, when his mortgage clearly states she is. The note has been sold several times and somewhere along the line this information has gotten mixed up.

The owner wants to sell to me and we are trying to see what our options are other than just a short sale.

He is also under the impression that he is protected from foreclosure because of a statute of limitations law. That states if a bank does not foreclose within 5 years, they lose the right to do so. But from the research I have done, a new law has since been put in place (just a few months ago) stating that subsequent foreclosures are allowed.

So my question to any lawyer or person who may be familiar with BK 13 laws. What are his legal rights? SPS is hounding him to pay and all this time he thought that they took it back. It is still in his name and has been vacant for 9 yrs. I did read somewhere where he is suppose to be protected from creditors who contact them for payment.

Any advice will be GREATLY appreciated! Trying to figure this all out. Thanks!

Joel, I am curious if you have ever purchased a note in this manner. His mortgage is currently with Select Portfolio Servicing for Wells Fargo, so as  you mentioned this option probably would not work, but I am curious if you have had success purchasing the note at a discount.

Also, once you purchased the note, wouldn't the process be more of a deed in lieu vs. quit claim?

Thanks @Joel Owens

Thanks for your responses. I believe that it was Chapter 13 BK and then he hasn't been making the payments. He does not live locally and all of the units are vacant, so he has no income coming in.

Thanks as always for the invite @Jon Huber. I look forward to getting back down there, but not this month either. Summer time is keeping our weekends packed!  Have fun with your baseball game!! =)

I just heard back from an owner of a 4-plex, that I originally contacted late last year. He is ready to move forward. He has not made payments on the property for years, had filed BK and no LP has be filed yet (as far as I can tell on the clerk of courts). He is getting collection letters from the bank. And what is owed to cure the default (approx $270) is about $70-$90k more than what I am estimating for ARV (I am still waiting on comps from my realtor). Each unit needs work, but I am again estimating about $5-8k could bring two of the units up to speed to rent and get income coming in while the 3rd and 4th units are rehabbed. They need much more work. Conservatively, each 1/1 unit could rent from $700-$800. Rentometer report states Average $745, Median $725, 80% rent at $550-$1000 and 60% rent at $625-$850.

So with knowing what I know a shortsale seems to be the obvious route to go. However, I am curious if there are other exit strategies that might make sense. To me a subject to would not work because the loan is upside down. And a lease option would seem foolish because of the work needed and no guarantee that the bank won’t move forward with foreclosure. So, any other options anyone can think of? I do have an experienced shortsale agent that I will be working with, but I am just curious of what everyone thinks about other possible options.

I have an appt. with my RE lawyer on Monday to review the title search and so I am sure he will clarify a lot for me, but would love additional input here.

Lastly, in the Itemized list of amounts the bank gave him to cure his default there were a couple lines that I wasn’t clear about. Can anyone clarify?

I originally thought these were the past due payments and then escrowed taxes and insurance, but the itemized list specifically states “Total amount due includes Escrow payments(taxes/insurance) of $0.

He is not behind on his taxes, so the bank had to be paying them.

Thanks for any input you can give me! =)

I am interested as well. Would you mind posting here on the board? Thanks!

Thanks @Ivan Vargas.  That's interesting. I'm not familiar with the project, but do know Brian.  Good luck with everything and thanks for your input on this subject. Good stuff.