Posted by John Behle on November 21, 2002 at 16:16:34:
A short sale is a discounted payoff. The term is a little confusing, because there really isn’t a sale in the way that it is normally used.
A discounted purchase keeps the mortgage in-tact and just transfers ownership at a discounted price.
Can mortgages be purch.at Pre-4closure from bank? - Posted by graymule
Posted by graymule on November 19, 2002 at 13:37:57:
I understand that in short sales, one approaches the bank with the consent of the homeowner to negotiate a buyout of the mortgage, but what if the owner can’t be located and the property in question is vacant? Are there any situations where an investor can approach the bank directly, negotiate an assignment of that mortgage and complete the foreclosure themselves ( these might be called silent sales??), thereby gaining the rights to the property? If anyone has experience with this type of transaction, I would appreciate details of your experiences and insights and advice regarding such transactions. Thank you.
How can I get in to look at such a property? - Posted by graymule
Posted by graymule on November 21, 2002 at 13:33:59:
If the Homeowner is not reachable, is there any way to get into this abandoned property to take a look at it prior to approaching or making an offer to the bank on it? It is a condo on a second floor located in MA.
How can I get in to look at such a property? - Posted by graymule
Posted by graymule on November 21, 2002 at 13:26:22:
If the Homeowner is not reachable, is there any way to get into this abandoned property to take a look at it prior to approaching or making an offer to the bank on it? It is a condo on a second floor located in MA.
Absolutely - Posted by John Behle
Posted by John Behle on November 20, 2002 at 24:11:24:
Despite the controversy created by one attorney that probably has no experience in real estate - you can buy mortgages that are in foreclosure. We do it all the time and it can be very profitable. I know of no state or statutes anywhere that would prevent a purchase of a mortgage, but I suppose it is possible. Most likely, the attorney mentioned below did not understand the question being asked or was totally in-experienced in real estate.
Yes… - Posted by JT-IN
Posted by JT-IN on November 19, 2002 at 17:52:30:
Mule:
Usually, once the lender has hired the Atty and commenced legal proceedings, they are less flexible. Of course this is not absolute, and I am familiar with this happening, and have negoitiated with Lenders in foreclosure, who for whatever reason, do not want to finish the task. In fact, working on one now which fits this scenario quite well, and do to the foreclosure action being socially unacceptable, based on it being a high profile, non-profit association, they are getting cold feet. We’ll see hwo it turns out…
There is nothing any different about buying the mtg at this point, regardless of the foreclosure suit, than if the mtg was current, except the motivation of the Lender. You can find Jr. mtgs, (2nds and 3rds) who are very willing to sell their mtg for a nice discount, and take something instead of nothing. However, nothing is what you could end with, if you don;t buy the right ones. (Personal experience: just don’t expect Bank One to sell out… have had no luck with them lately).
Just the way that I view things…
JT-IN
No Offense to Mike - Posted by Sean
Posted by Sean on November 19, 2002 at 14:47:16:
But it’s not illegal to buy mortgages and it’s not illegal to foreclose.
However, I have no experience in this matter.
No - Posted by Mike
Posted by Mike on November 19, 2002 at 14:39:56:
Not in preforeclosure, that would be illegal.
Re: Absolutely - Posted by James Buster
Posted by James Buster on November 20, 2002 at 19:14:50:
Even institutional lenders? My understanding is that they (almost) never discount firsts, even if they would otherwise accept a short sale on the property. Must be a tax issue, since I see no effective difference.
Re: Absolutely - Posted by D
Posted by D on November 20, 2002 at 11:12:21:
How do you buy the mortgage if the owner can`t be found and the place is vacant? Thanks for your input! D
Re: Yes… - Posted by Mike
Posted by Mike on November 19, 2002 at 20:41:15:
I’m very much still a newbie but this was probably the first question I asked my lawyer. I was told that once a property is formally in preforeclosure and a notice has been published there’s no way to buy the 1st on the property until it hits the auction block, that is unless the seller wants to play ball. Maybe this process is mandated by each state and differs around the country?
Re: Absolutely - Posted by John Behle
Posted by John Behle on November 20, 2002 at 20:08:15:
The question was about whether it was legal, which it is. Instituions will discount any loan if it is to their advantage and they can see it. Problem is them seeing the advantage. They discount seconds much more commonly than firsts because they may be at higher LTV’s, be buried in the property and un-willing to chase bad money with good by taking over senior liens.
They also are much more willing to do a short sale than to sell the note at a discount. Sometimes even when we are talking buying the note, all they hear is short sale and then become more reluctant when they finally understand. It’s just a gamble and depends who you are talking with. I’ve seen where institutions walk away from a loan rather than discounting. I’ve seen them discount substantially when they are in a good position as to LTV and refuse to discount when they are going to take a bath. Sometimes it depends on strange bank policy or the intelligence of the person you are dealing with. There are some wonderful, bright and even creative people out there in instutional lending, but more often than not, the person you end up dealing with is just a little above minimum wage, with no real financial training and what seems like double digit IQ’s.
It’s worth the try and can be profitable, but as the saying goes about bankers “He had the mind of a steel trap - rusted shut”.
Re: Absolutely - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on November 20, 2002 at 12:52:44:
D-------
You buy it from the lender. You don’t have to talk to the owner about the matter.
Good InvestingRon Starr********
Lawyer may have misunderstood question - Posted by JT-IN
Posted by JT-IN on November 19, 2002 at 21:19:19:
Mike:
Yes, the location by state is critical when discussing what can and can’t be done legally, due to the laws differing so greatly from state to state. It is advised when posting about foreclosures that the poster list the state in question, as it may assist the “sometimes knowledgable”, experienced investor in offering you some advice.
With that said, it appears to me that the Lawyer may have been a bit dicombobulated (legal term) on his assessment of your question. He may have been referring to “new filings of judgements or liens” when a property has had a Lis Pendens (Notice of Suit) filed. Following the Lis Pendens any attempt to record a new lien will be futile and disallowed, due to the elimination of same by the filing. This in no way eliminates the ability for the Plaintiff (speaking purely judicial states) from conserving their asset, whether that be selling it or otherwise.
Just the way that I view things…
JT-IN
PS. BTW, just for kicks, tell the Atty a couple of bearded, balding, overweight, (and successful foreclosure) RE investors said he was all wet, and see what he says… LOL
Legal for lender to sell defaulted loan? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on November 19, 2002 at 20:46:46:
Mike-------------------
You are right, the laws relating to foreclosure differ dramatically from state to state.
There is also the possibility that your attorney was in error. I suggest that if it is important to you to know how the foreclosure laws work in your state that you take nobody’s word for it–including that of a attorney. I recommend that you read the foreclosure laws yourself. In “annotated statutes,” not just the raw “black-letter” statutes which have no court interpretations added.
Good InvestingRon Starr
Diff. betw. short sale&discounting notes??-nt - Posted by mawi
Posted by mawi on November 21, 2002 at 13:38:45:
Thanks
I misread the question - Posted by D
Posted by D on November 21, 2002 at 10:14:08:
I realize you can buy a mortgage from a lender and proceed with forclosure, I thought the question was if you found an abandoned property if there were a way you could somehow gain the right to encumber the property and make an offer to settle with the lender. Thanks for your input. D
Re: Lawyer may have misunderstood question - Posted by Mike
Posted by Mike on November 20, 2002 at 11:48:40:
Sounds like I better doublecheck with the attorney on this one. Or better yet call a few lenders on the preforeclosure properties I’m following right now and see if they are willing to talk. Cheers.