If I give someone a deed in lieu of foreclosure - Posted by Jon

Posted by jon on February 27, 2004 at 13:33:24:

My wife will own the mortgage. If the owner deeds us the property, it will be in a land trust with a corparation being the beneficiary.(if need be)The taxes are only a little less than 12 months behind.
The owner had it listed for a year and wasn’t able to sell it. The bank said they don’t won’t the property…they told him they would short sell. He doesn’t want to deal with it. He purchased it for $75k about 12 years ago.(listed it for 70k. Any business that rented the store never made it. He had a bar in there and that went out of business.It’s in an area near buffalo,NY where the economy is not good.
I figure the worse case scenerio would be that I collect rent until the city forecloses for taxes. I called the tax assessor’s office, they said I have a good 2 years from now before they start anything.

If I give someone a deed in lieu of foreclosure - Posted by Jon

Posted by Jon on February 26, 2004 at 23:01:08:

I’m purchasing a 30k 1st mortgage from a bank for 2k.
The owner just wants out of the mortgage. What’s the best way to keep the mortgage in 1st position and relieve him of his obligations to the mortgage and have him sign over the deed?

Re: If I give someone a deed in lieu of - Posted by Sean

Posted by Sean on February 27, 2004 at 07:58:41:

When you buy the mortgage from the bank, you now hold the mortgage… .you have the right to foreclose on the owner if he is in default… so you can have the owner deed the property to you in lieu. Or you could just get him to deed the property to you without threatening foreclosure, and then file the satisfaction for the mortgage you now own.

OR, once you own the mortgage, you chould just write up an offer to buy the house for the face value of the mortgage… and go to a closing where no money changes hands other than taxes and closing costs… and use the mortgage as the “money” for the purchase… IE, in effect, you pay him 30k, he then takes the 30k and pays it to you for the mortgage which you then satisfy… no real money changes hands, but thats what you would be doing on paper.

Re: If I give someone a deed in lieu - Posted by JCGinIL

Posted by JCGinIL on February 26, 2004 at 23:45:57:

You can only give the bank a deed in lieu. If you are purchasing it from the bank, then you are in the 1st position because you bought a 1st position mortgage. You are “essentially” the bank. You can have him agree to do “whatever” can help him.

you mean to keep the loan? - Posted by Izzy

Posted by Izzy on February 27, 2004 at 09:11:52:

you can sell the note :wink:

Re: you mean to keep the loan? - Posted by Jon

Posted by Jon on February 27, 2004 at 10:52:47:

I’ll like to keep the mortgage in first place in case other lien holders pop up.(I may just foreclose on the property if the owner doesn’t cooperate) I know I have $4600 in real estate taxes that are due. I would like to get about 10k down for this property and let someone assume the mortgage for about 30k(with a 3-5 year balloon) and have them pay off the taxes.The 2 apartments bring in $750/month total, and the store front is empty.(any suggestions for a better structure)

Re: you mean to keep the loan? - Posted by Nike

Posted by Nike on February 27, 2004 at 11:44:58:

Jon,

Be sure you have the bank assign their position to you. You will then have all the rights (and obligations) of the first-lien holder. You don’t want to just pay-off the first mortgage-- hopefully you have an attorney handling this for you so you do it properly. That you negotiated with the first-lien holder to accept $2,000.00 is stunning- congratulations.

As far as you selling it with the mortgage in place- remember the current mortgage you’re assuming has terms in place- if you wish to sell with owner financing with terms other than those outlined in the current mortgage you’ll have to formally replace with a new mortgage. This may be obvious but your post suggested otherwise.

By the way–who holds the first lien you’re buying?

Good luck.

Re: you mean to keep the loan? - Posted by Jon

Posted by Jon on February 27, 2004 at 12:11:52:

Key bank holds the mortgage. Can I file an addendum to the mortgage instead of writing a new mortgage?

Re: you mean to keep the loan? - Posted by Nike

Posted by Nike on February 27, 2004 at 13:11:47:

Jon,

Just to clear we’re talking here about after you take the assignment from the bank- you want to have a third-party buy the property subject-to the mortgage? Yes, you can file an addendum to the original mortgage and have the have the new buyer sign the addendum. I suggest you have an attorney draft the agreements and see that they’re filed properly.

One thing I’m not clear about- are you going to take title after the assignment? Are you going to have a corporation assume the mortgage? If you’re taking title who will the property be deeded to? If the same person is assuming the mortgage and taking deed- the deed and the mortgage may merge. Just be sure you sort this all out so things proceed according to your plan.

Key Bank holds the first? What’s going on with the property that would lead them to accept only 2k for a 30k note? You mentioned property taxes are owed- has someone purchased the tax certs and now are moving to get a tax deed? I’m curious. Thanks.