All Forum Posts by: Ryan Biankowski

Ryan, I agree with everything that has already been said about the property. At this point, just continue to watch it and wait for it to come onto the MLS for sale from the bank. I highly doubt anyone will bid on it at all...unless they are crazy. Once it comes out, you will be able to purchase before investors because you plan to live in the home. If there's a first look period, you win! That gives you a proper opportunity to inspect the property and bring any contractors in that you might need to bid on mold, foundation repair or other special items.

Now, that being said, next time you are trolling a property for over a YEAR, take steps early to contact the homeowner and try to work out a short sale helping them AND you in the situation and keeping it from the court house steps.  That $360k the bank is asking includes all the years of penalties, extra interest, taxes, property preservation, attorney fees, etc....  likely you could've worked a nice deal a year ago and done it with permission to inspect the home first. When homeowners truly understand how you can help them, they generally jump on board to work together with you.

My 2 cents....

Assuming that the loan is FHA-insured (as that vast majority of mortgage loans at that number are), the lender will simply make a bid at the outstanding loan balance and take the house into its REO portfolio. The lender will then shift it to HUD and collect whatever insurance proceeds it can collect. The lender won't lose any money here and it's highly unlikely that the lender will respond to another bidder that is coming in with a lowball bid 2 weeks before the auction.

I hate to be cynical here, but the mortgage lending industry is set up so that losses are fobbed off on taxpayers through FHA insurance and HUD programs. I just went through a big analysis that touched on this on a house I wanted in Milwaukee. The house had not been updated in more than 50 years and the owner recently passed away, but the house is subject to a reverse mortgage. FHA reverse mortgage rules and regulations throw a monkey wrench into the whole process of trying to get the home for a price that reflects its true current value (and not its ARV).

When the lender made the reverse mortgage deal, it got an appraisal on the house that was easily 80% higher than the real market value of the house. That allowed the lender to give more money to the owner at that time, but the principal balance of the loan has since ballooned to at least $25,000 above the real current ARV of the house. The reverse mortgage rules are such that the lender will now just take title to the house, dump it into a HUD program, and collect its losses from FHA insurance. The saddest part of this is that the house will sit vacant for 12-24 months while the process plays out.

Move onto the next deal and don't try to fight the process here.

@Elizabeth Wilson is correct without a sign permission slip from the owner trustor/mortgagor you wont get any love from the bank.

this will go to sale and you need to be prepared to bid.. is there a right of redemption in WI?

you can try to buy the note but same thing one of note buyers with no contacts at the servicer or bank will be wasting their time.

also remember many times once it comes back on the market as an OREo you get a better deal

two years vacant this thing could be totally under water money wise..

lastly your spread is too close.. you will not do well paying 300k all in for a 380k flip  lucky to make 20 to 25k on that deal.. sure you want to take on that big of project for that kind of money