Hey Guys, I was just wondering if there's anything I can do here to keep this guy from getting into foreclosure.
ARV - 115
Owes - 98k
Needs cosmetic repairs
Needs to get 7k to catch up on mortgage and pay attorney’s fees
He’s been out of work for almost a year, and the bank wants to foreclosure around October. There’s really almost no equity, and he says the bank all ready said it would not go for a short sale. I know this business is about helping people out, is there anything I can do to help this guy from losing his house? Any creative solutions? I really appreciate the help. I’m new to this business, but I really have a heart to help people if I can.
That, but more than anything “the bank all ready said it would not go for a short sale”. Unless the bank will work with you, you won’t be able to create equity. You can always try, though. Maybe you’ll get another loss mitigator that will say “yes”. Don’t get yourself too tied into the property, though, or else you will end up forcefully helping this guy as your real-estate business transforms into a non-sustainable charitable organization.
True, the short-sale business is about helping people in bad situations. Its just as much, if not more so, about the investor making a profit. At least enough to cover costs (that includes time invested), pay bills and put food on the table. If its just a hobby of yours, that’s fine. One thing about hobbies - most hobbies cost money; they usually don’t make money.
One piece of advice I keep hearing among the short-sale circle: You can’t get emotionally attached. If you do, it will psychologically tear you down. Yes, you do create solutions and help people, but you have to keep your emotional distance. Its a very fine balancing act.
The bank’s procedures require them to always say “No”! The loss mitigator’s job is to try to get the most money possible from the defaulted loan. Just becaus there is “no equity” in the figures does not necessarily indicate that the deal can’t be done.
You need to find out more about the nature of the loan (i.e., is it FNMA, FHA, VA, etc.). Each type of loan product has it’s own “rules” for loss mitigation. There are many experts out there that can help you work through this (Steve Dillon and Curtis Brooks are two of them…I just heard Dillon talk today).
The next step is putting in a SS offer that shows the bank ( on a Net Sheet) that they will be better off selling the house to you for less than is owed vs. buying it at auction and selling it as a REO.
Don’t give up yet!
I really appreciate all the replies. I’m going to ask him more info about his loan. I need to do some more research to learn about all these things so I know what to ask him. What are some good specific questions that I should ask him?
I would want to know if He did an 80/20 loan or if he did the whole thing through one bank. If he financed it through one bank and has been paying PMI, the bank may let it go into forclosure, get the pmi money and then see what the property brings on an open market.
He has a conventional loan through one bank. He financed it all. He didn’t try a loan modification but he says it’s too far gone now. It’s supposed to be foreclosed on in a couple months and he’s six months behind on payments. He says he talked to the chief financial officer at the bank and he said that he would not take a short sale. Maybe I should just let this one go. I’m trying not to get emotionally involved like you guys said, but just look at the numbers.