FORECLOSURE AFTER CHAPTER 13 BANKRUPTCY - Posted by Frank

Real Estate Investing Real Estate Law
1

Posted by Bill H on August 18, 2007 at 13:12:42:

Thank you for clarifying…I ain’t an attorney and do not play one but here’s my input:

I’m trying to help a family whose wife works with my wife. What they need is a cash buyer to buy the house from the bank, then write up a land contract (e.g.) between the buyer and the family, assuming of course that the numbers work for everyone…
Very admirable indeed…However exerience has shown that these things can get VERY sticky. Were I you I would have everything at arms lenght and gain NOTHING other than satisfaction from the deal.

There were no successful bidders at the sale, other than the bank. The bank owns the house, the redemption period is coming to an end…

Yes, the hank has control of the house…they do not in reality own it until the redemption period ends.

From your original post I still say…have them present their plan and show their ability to pay the $1,000 per month to the bank…If the bank is satisfied…the deal is done. do not need and investor or anyone to intervene…they have the $$$ and ability to pay…the bank allows them to redeem…you get your SATISFACTION but no $$$.

I know, on a Short Sale, the foreclosed owners cannot benefit monetarily. If an investor buys a REO property, I’m guesing that investor can turn around and do whatever (s)he wants with the property…

Yes the incoming investor can and most like will do as they please…that is why I strongly recommend you have them present their plan to the bank…NOW!

Very few if any investors like to buy at the sale and turn around and rent or sell to someone who has just gone through froeclosure…not good business in most cases.

Is the purchase of REO properties at reduced prices still called Short Sales?..

NO, the bank can sell it for whatever they wish.

Regarding my involvement, I wouldn’t turn down a referral fee :)…

I would if I were you. Getting involved and profitting from friends, neighbors, co-workers, etc…who are in distress and relying on you for help…is NOT worth the hassles and ill feelings that can and often will come later.,believe me…been there done that.

Help them in any way you can…do not (without being licensed) represent them in negotations, etc…that too will cause problems.

Hope it works out for the best for all.

Good Luck,
Bill H

2

FORECLOSURE AFTER CHAPTER 13 BANKRUPTCY - Posted by Frank

Posted by Frank on August 17, 2007 at 10:55:20:

I would like to help this family, living in Michigan. Hereâ??s their (shortened) story:

  1. Filed CHAPTER 13 a while back. It sounds like they were talked into the 13 instead of chapter 7.
  2. Prior to filing, their mortgage payment was right around $1250.
  3. After filing, their mortgage payment got up around $2000, which, of course, they couldnâ??t handle.
  4. Now the redemption period is ending and they want to know what to do.
  5. During this time, their pay has increased to the point where they think they could qualify for a payment of around $1000.
  6. The bank has indicated they would take a reduced amount on the mortgage.
  7. If the amount can be lowered enough to make the $1000/month figure work, would it be legal to keep them in the house, maybe selling it to them on a Land Contract (they are in Michigan) or a lease option, orâ?¦ just renting it to them?
    Thanks for any advice.
3

Re: FORECLOSURE AFTER CHAPTER 13 BANKRUPTCY - Posted by Bill H

Posted by Bill H on August 17, 2007 at 21:55:44:

Not sure I understand where you fit into the picture.

You posted…

  1. The bank has indicated they would take a reduced amount on the mortgage…
    Present their payment plan to the bank and see what happens. If the bank is satisfied…it is done.

  2. If the amount can be lowered enough to make the $1000/month figure work, would it be legal to keep them in the house, maybe selling it to them on a Land Contract (they are in Michigan) or a lease option, orâ?¦ just renting it to them?..

Banks do not rent or sell on Land Contracts,lease option, etc…were you the successful bidder at the sale and are trying to assist them or better your position? Are you tryng to negotiate for them?

Exactly what is your involvement?

Good Luck,
Bill H

4

Re: FORECLOSURE AFTER CHAPTER 13 BANKRUPTCY - Posted by Frank

Posted by Frank on August 18, 2007 at 09:43:24:

I’m trying to help a family whose wife works with my wife. What they need is a cash buyer to buy the house from the bank, then write up a land contract (e.g.) between the buyer and the family, assuming of course that the numbers work for everyone.

There were no successful bidders at the sale, other than the bank. The bank owns the house, the redemption period is coming to an end.

I know, on a Short Sale, the foreclosed owners cannot benefit monetarily. If an investor buys a REO property, I’m guesing that investor can turn around and do whatever (s)he wants with the property.

Is the purchase of REO properties at reduced prices still called Short Sales?

Regarding my involvement, I wouldn’t turn down a referral fee :slight_smile: