Posted by John Merchant on September 10, 2006 at 10:28:43:
I do some of these because there’s so much equity in the specific property that overall, it makes sense…as I’d gain more through foreclosure than if they paid as scheduled, and those are usually the safest loans I’ve found as the owner has too much to lose to have it happen.
But on these, my preference is to take the title now and let the people stay there to see if they can better their circumstances and buy the house back.
Giving a second mortgage to Foreclosure - Posted by Tommy
Posted by Tommy on September 09, 2006 at 19:27:11:
Can i give a second mortgage for a homeowners arrears and hold a car title so they dont file bankruptc?
Re: Giving a second mortgage to Foreclosure - Posted by John Merchant
Posted by John Merchant on September 09, 2006 at 22:21:39:
I’m occasionally involved with buying houses from sellers who’re upside down, and I do so in lieu of making a straight loan with a 2d lien DT.
They give me a deed, but then simultaneously lease it from me for a year or two, with an option to repurchase it at a higher price.
But there are legal issues and potential legal obstacles in doing this and there have been some suits around the country against the lender, like me, when that lender has to foreclose for nonpayment of note payments.
So I’d advise you find a savvy RE lawyer in your area and work with that L in putting together a system to bulletproof yourself in protecting you if you do this kind of lending and then get sued for taking advantage of incompetent person, or using unlawful duress, or making a disguised but illegally usurious loan, etc…claims like this could later be filed and it’s better to prepare upfront.