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Need help on this subject to deal - http://www.dealmakerscafe.com Forums

Original message

tarun

"Need help on this subject to deal" , Sat 26 May 21:25

Hey guys,
I took a house subject to earlier this week. I was not too excited about this deal(you'll see why) but I still decided to give it a shot so that I could get some experience on these type of deals.
FMV is 148k
MTG Balance is 120 at 7.5%(FHA loan)
He is 15k behind in payments
3 months ago he filed for a ch 13 that stopped the foreclosure
The BK in still pending. He still needs to submit the final paperwork for the BK. Moreover, he filed the BK himself. There is no attorney involved. The seller might not even proceed with the bankrupcy and let the house go into foreclosure. He doesn't care. The bank told me that at this point there is no foreclosure because of the bankrupcy.
The bank won't even talk to me since they are not allowed to say anything ove the phone on a property that is in Bankrupcy. They were only willing to give me bits and pieces of information. Not the wholes story. When I call the bank, I keep getting transferred from one department to another with no luck. I wanted to get them to restructure the 15k backpayments. They probably wouldn't do a short sale since this is a FHA guranteed loan.
Is there any way I can make this deal work?
Thanks!

Tarun

Replies:

dealmaker
Moderator

"sticky" , Sun 27 May 13:12

Looks like a sticky situation. Especially if the seller could careless about the house going into FC. Also, the 15K in arrears hurts!!

With this guy filing his own BK, I would let this one pass. Looks like you may have a lot of headaches down the road.

There's better deals out there.

Dealmaker

tarun

"Matt..What if I ask him to file the BK" , Sun 27 May 15:09

Matt,
What if I ask the seller to proceed with the bankruptcy. The bank will then hopefully accept the payments on the piti as well as the extra payment for restructured 15k because of the bankruptcy. If both the payments are less than what I can lease option it out for, the deal might work. Of course, I would need to get permission of the BK trustee to proceed with the sale.
What do you think?
Thanks so much!

Tarun

dealmaker
Moderator

"What if I ask him to file the BK" , Sun 27 May 16:47

See if the lender will agree to a re-structuring plan the payments. Sometimes they can be too high to be profitable. My last experience, the lender added tons of fees and penalties that made it unreasonable.

Will the BK Trustee see an equity in this house?? Here the BK Trustee will let the seller keep the house or sale it if there is no equity. However, if they 'see' equity they want the home sold to satisfy the creditors.

My main concern is the seller.. he/she seem a little too unstable to deal with. I like dealing w/ people that are stable and that "want" a solution & are willing to cooperate for the best outcome of everyone.

Dealmaker

wgreau

"Re(1):Need help on this subject to deal" , Sat 26 May 23:26

Tarun: You need to contact the "Loss Mitigation Dept" at the lender, if you haven't yet, because they handle that. If your seller has, in fact, filed the BK then there isn't much that can be done until the court processes it. After that you can get the seller to provide a list of debts, copies of bills, and show a position of hardship on paper, have him sign an "Authorization To Release" information form, take some pictures showing repairs needing to be made, make a list of estimated repairs and their costs and then fax it to the LM dept and they may negotiate a short sale with you. The only one I did out of a BK had to be submitted via the seller's att'y to the BK trustee for approval or release. Hope this is of some help. Best wishes!

William Columbus OH

tarun

"I did call loss mitigation" , Sun 27 May 02:31

William,
I did call the loss mitigation department. I even faxed them an authorization to release loan info. They will not cooperate with me because the property is in bankruptcy and they are not allowed to discuss anything about a property that is in bankruptcy.
They keep telling me to go talk to the bk attorney. However, the seller filed the BK himself and there is no attorney involved. The BK has not even been discharged yet. There is still some paperwork that the seller has to submit for the bk to be discharged.
Any suggestions?
Thanks

Tarun