Hi fellow investors:
Need some advise. I am a new wholesale investor and like to know, is a pre-foreclosure handled differently than a FSBO deal? Does the ownwer still have total control of property, or would investor buyer have to deal with a bank/mort.co. Any info. regarding the handling of pre foreclosures will be appreciated!
rconline
YES pre the owner can be delt with
A lot of the time they are still in the home up to all most the end as they do not think they will be kicked out
Iam dealling with one now where the sale is set for the 22 of this monthe and they are now moving out
As well now with about two weeks calling me to tke over the property
And i am at a hard spot as i can not get hold of any one at the loan company to tell them the back payments are comming
A FSBO deal is not a short sale, so the owner is in complete control and no third party lender approval is needed, if the sale will pay off the mortgage. If you are planning to take over the payments, you need to read both the original note and the security instrument to be sure that taking over the payments is allowable under those contract instruments.
A pre-foreclosure, or short sale, occurs when the purchase price will not pay off the mortgage in full plus all costs of sale. The seller should not care who takes the property or at what price. The sale is contingent upon lender approval (secondary market investor or MI carrier, or both), so you must meet the terms of their requirements for a short sale.
Besides the required documents, most lenders are using a minimum threshold net receipt of the fair market value analysis now instead of the short sale vs. REO analysis. HUD backed loans (FHA/VA) require 84% of the fair market value if the home has been listed on the MLS for 60 days or more, and 88% if not listed or listed for 30 days or less prior to the sale.
I was not absolutely certain what your question was, did this response answer your question? if not, you can post again or email me for clarification.
I was needing more clarification. Would the seller in preforeclosure case be treated as a FSBO as long as the money from closing covers the costs the lender needs? Will the seller get the profit after the lender is paid off? What does the lender need to know if there is no need to reduce what is owed?
Ok, I see what you are asking. It is strictly a FSBO unless you are needing a short sale. You do not need lender approval if they are being paid in full. The only thing that the status of pre-foreclosure brings is added fees. The only critical part is that the money for the lender at closing must be received by wire by the lender before the foreclosure and in time for them to notify the attorney or trustee completing the foreclosure.
I hope this has been helpful.
Thanks, that info helps tremendously.
dude are you seroius, you have a person that is owner occupied that is in pre-forclosure and you want to pay the note in full… Are you NUTS???
Do a Shortsale… if you are willing to pay in full then nothing lost, the lender will certainly reduce… you have everything to gain!!!
Do a shortsale!!!
&
dont leave money on the table!
I second that. If you do a short sale, you can get the property for less than what is owed. If you want to pursue that, you need to learn about how it is done. We have a book (very inexpensive) that will explain it from start to finish. Then if you want to do it yourself, we also have the forms available for you. Or, if you want, you can have us process it and deal with the banks. We can help you whichever way you want to go.
But I agree with matshingdo001 that you could make much more money on the deal by purchasing it in a short sale.