Posted by Tom Brown on December 10, 1998 at 11:33:09:
One of the first things you should do is have the owner talk to the bank and see exactly what they are willing to do to bring the loan current. You said that she was $6600 in arrears. I am assuming that is just the loan payments, interest. The owner needs to get in touch with the bank ASAP, because eventually there are going to be attorney fees attached to the balance which typically run 10% of the loan balance.
Also the 125K appraisal 2yrs ago is worthless. Especially if the place was trashed after the appraisal was done. While you are waiting for word from the owner regarding the loan problem, consider estimating the repairs needed. You might also want to get comps for the area and do a market analysis of the property in its restored condition.
At the very least, someone is going to have to have the cash to bring the loan current. If the house was in decent shape you might could borrow the money, but from what you have said, this doesn’t sound like an option.
Remember that properties in the foreclosure process must be acted upon very quickly. Time is defintely your enemy in these cases.
Since landlord/tenant laws vary drastically from state to state, I can’t help you in that regard.