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HELP - 1st subject to deal -income based loan - http://www.dealmakerscafe.com Forums

Original message

Steve

"HELP - 1st subject to deal -income based loan" , Thu 19 Oct 17:06:

Hello, I just got a call about a house - the guy is behind 3 payments and his payments are only $285.00!!! He says the loan is based on his income. House is worth $55K..

Should I avoid this one? I meet with him Friday @ 4:30. I'm specifically looking for information about his type of loan and if it's possible to take-over via subject-to!

Steve - Wow, this is getting exciting!!

[this message was edited by Steve on Thu 19 Oct 17:08]

Replies:

wgreau

"Re(1):HELP - 1st subject to deal -income base" , Mon 23 Oct 20:32

Steve: Like Jackie, I also had one of those type deals. I couldn't understand at first why the payoff (balance due) was so high compared to my calculations with term, interest, mo. pmt, etc. Then after a couple telephone calls it occurred to me that being a gov't subsidized loan...they were recouping their subsidy. Like Jackie's, this property needed lots of repairs & upgrades (like a large rotted deck) and more. I am not that experienced and have never liked working with the gov't in other areas so suggested the sellers offer their lender a deed in lieu of foreclosure...if they would accept it. The property was about an hours drive away and I was glad for my decision...all things considered. Now I am even more glad.

William Columbus OH

Jackie

"Re(1):HELP - 1st subject to deal -income base" , Thu 19 Oct 20:41

Sounds like one I ran into last year.

It's probably a Rural Housing loan since it's income based -- which means that the federal government is "subsidizing" his payments.

Which means that when he wants to sell the house - the government wants to "recapture" their subsidy.

With my house the unpaid principal balance was $18,000 and they were $8,000 behind ( only with our government could that happen) but the government wanted $72,000 to recapture their subsidy.

I was able to negotiate a discount because of the condition of the property - and bought it for $28,000.

It's ARV was $72,000

It only took FOUR months to get the government to agree to the discount.

By the way - I did a quick flip on this one for $4800 -- just too far away to deal with.

Jackie

dealmaker
Moderator

"Good one---" , Thu 19 Oct 19:57

This is going to interesting. The problem I see with this one is how will the seller report his income on a house he doesn't own...could be problem..or fraud..

First, YOU verify what the seller has told you! Read over his documents and make copies, if necessary. I have run into all kinds of deals where the seller had NO clue that they refinanced 2 years ago, or something crazy like that... sometimes they have no clue.

I have not run into this as of yet. Maybe Jackie or Lynn can contribute.

Dealmaker

lynnhahn
Moderator

"Re(1):Good one---" , Thu 19 Oct 22:26

I have never ran into this either. I would follow Jackie's lead and be very careful with my due diligence so that I knew what I was getting into.

Good Luck!
Lynn

Those who say it can't be done are usually interrupted by others doing it!