OfflineI have a question which I guess is kind of legal..I understand the concept of locking up a contract on a Pre-foreclosure at a discount; and then assigning that contract to an end buyer Investor for a profit*(assignment fee). My question is-If a Seller has gotten a sherrifs sale letter stating he owes $150,000 on his house;and it is due to be Foreclosed upon next month(For example)-how can I legally do a Purchase agreement for less? (Say-I offer him $100,000 with intention to sell the contract for $110,000 to an end buyer investor and my assgn fee profit is $10,000). How can this legally be done when the Orig Bank Loan is for $150,000-and they "technically" own the home since they havent been paid; and we just "bought" the property from underneath the bank; and "sold" it to an Investor. Do we need the banks approval for all this?-or what am I missing? Thanks everyone for their input.
__________________
JER 29:11 Thoughts of Hope; thoughts of a blessed Future
I believe, if you are dealing with a pre-foreclosure, that would be considered a short sale...Which means you are dealing with the bank, not the owner of the house...The banks are pains in the butts to deal with...And they don't a lot of the time accept the assignment clause...Unfortunately...
Dont see why not though, cause banks actually pass/assign there loans to other banks...It happens all the time...
It is not impossible by any means, but ya just gotta make the offer, and go for it...The worse that will happen is they turn you down...Dealing with the bank also takes longer too...They don't rush at all...
I don't see why they wouldn't accept anything, just to not get it on their books and have to pay the extra for foreclosing...It ends up costing them a lot more foreclosing, then them accepting less than the house is worth in a lot of cases...
Hope that helps ya
~TAKE ACTION AND THINGS WILL HAPPEN~
***Something to Believe In***
"If you want something, GO GET IT...PERIOD" Will Smith
***"I CAN'T IS NOT A EXCUSE...IT JUST MEANS YOU WON'T"***
"Obstacles are those frightful things you see when you take your eyes off your goal" Henry Ford
~"Success doesn't come to you...You go to it" Marva Collins~
I am/was in the process of buying my FIRST EVER house and I got stopped short because of a short sale. I am looking for advice on what avenues to follow next. The short version of the short sale goes something like this. I found a great house in short-sale, had my realator make an offer, offer was accepted, organized the financing, had inspections done, put money in escrow, and my realator calls me yesterday to tell me that the HUD-1 was filed incorrectly and the bank wants $13,500 more than the original agreement. The realator for the bank is the one at fault (so says my realator) and now I am canceling the contract. I really like the house and was wondering what I should do next. My Aunt gave me Dean's book when I was half way through this whole process (the day after I stayed up watching him on T.V and planning to order the book after payday!) and I have read it cover to cover. Is there a way to cut out the realators now? Should I wait a few weeks and contact the bank directly? I am a bit confused, but I do believe that life works out the way it is suppossed to - I also found out 2 days ago that the house needs a new roof by the FHA inspector. Should that be used as a leverage point when I call the bank?
Thanks and looking forward to advisory!
Hi Dakota, Just curious, what is your attorney advising you to do? I wouldn't cancel anything until you speak to your attorney. Because it's a legal binding contract after it has been reviewed. Ask for the adjustment for repairs. Good Luck!
"GOD IS STILL IN CHARGE, HE IS THE AIR WE BREATHE"
West- When someone is in default you cannot deal with owner, you have to deal with the banks at that point. Not to say you cannot work with the owner and the bank together to solve the problem - but in the situation you are describing the owner owes $150k. If you were to buy that house and give the owner $100k check you would soon find out that to own it you needed to cut another $150k check to the bank. The bank holds the lien - so the current owner can only sell the property by satisfying the lien. Unless the owner was going to take $50k out of their pocket on close to pay the bank, this is not possible. You need to pursue a short sale with the bank.
Dakota- You should start a new thread. Posting your question/problem that is not closely related to the original post is called "thread hijacking". However, do not cancel the contract, get an attorney to try to hold them to it, unless you no longer want the property at the original price. The fact they bumped up the price is indicative of non good faith. Again, start a new thread to address this further or to give updates.