OfflineI need help from the seasoned Investors in here.
I have a potential seller with great equity that will be willing to sell her house within a year, but until then, she wants me to help her solve, or guide her to the right direction with an issue she has with a Hard Money Lender. Will I be able to make money for my service?
Her scenario in a nut shell:
She's owned the house for 22 years and has 2 mortgages. In 2006, she borrowed 50K from a Hard Money Lender to help her run her business. The original agreement stated, she was not to pay any payments towards the 50K for 180 days. She then lost her job and the lender never attempted to collect any payments since 2006 and she had no payment schedule in place and did not know when,where,who to send payments to. About 2 months ago, she was late on her mortgages but is now current with her mortgage. Somehow, the private lender was aware of her being late on her mortgage and has decided to file an NOD and states she must pay 80K in order to avoid foreclosure. They have scared her to death with the possibility of foreclosing her home. She has called the broker she initially dealed with but they will not work with her in any way. Is this possible? what can she do? How can she get the Hard money Lender out of the way. Is this considered a 3rd mortgage?
I would think this would be considered a predatory lending and, if so, what can be done?
I would really like to help this lady out and possibly getting paid for my service.
Any advice and/or help will be much appreciated.
Aris A.
From LA
Anyone?
Posting again to bump up in recent posts.
Anyone got any suggestions?
Aris,
There is not enough information to answer your question accurately. However, it sounds like your friend borrowed $50K for 3 years from a hard money lender and has made no payments. If the interest rate is 12% or more the payoff amount with interest and penalties may indeed be $80,000. I am assuming the hard money lender is specifying the payoff amount is $80,000.
Your friend could have an accountant look at the specific terms of the loan and calculate what the payoff amount should be, then she would know for sure.
If your friend cannot pay off the loan she could try:
1. Re-negotiating a loan modification (or a new loan) with the lender
2. She may want to take out a loan with a new lender (hard money if necessary) in order to pay off the existing lender and start a new loan clock.
3. Something else???
Another unknown is what the hard money lender has as collateral. Is the home the only collateral or is there some other asset that is collateral too? If the hard money lender is in 2nd position, if they foreclose what will happen (this is where a lawyer would need to review the contract)? As you can see this starts to get complicated. The hard money lender may have interest in getting the property, or they just want paid what they are owed, hard to be sure what their goal is.... Hopefully they are one of the good hard money lenders and will work something out with your friend.
Sorry I cannot provide a better response, but these are my initial thoughts based on the limited information.
Good luck,
Carl
Invest wisely and prosper...
Carl