Hello Everyone,
I have a possible seller with some motivating issues. He’s gonna give up his house to the bank because he is upside down. I would like to take it over sub 2 and try to get the mortgage reduced. We have a lot of attorneys advertising that they can reduce principal amounts here in Las Vegas. My question is has anyone ever took an upside down house sub 2 and sucessfully modified the loan creating a good deal? Or is this a losing endeavor? Thanks to all that respond.
Try it. We’re more familiar with taking sub2 and negotiating a short sale, but a loan mod with a reduction in principal might be profitable. The issue with a loan mod (and/or a short sale) is that the lenders want the original borrower’s financial statement and evaluation of their ability to pay. If the borrower’s got a lot of income, assets and cash, you’re screwed… (and so is the original borrower) Just saying.
We’re better off taking title, renting the house out, putting it up for a short sale, and waiting. Meantime, we collect all the rents, regardless of what the bank eventually accepts or rejects.
Do you know who the lender is?? If we knew that we could better tell you what your chances are to get this done… I have worked in this field for just over 19 years now and have done deals with every lender. (I still work for one to be honest)
You have another option:
You can structure a long term lease option and flip the contract for fast cash… if you wanted to.
This might can free up your energy to look for an already existing good deal… ?
Try it. We’re more familiar with taking sub2 and negotiating a short sale, but a loan mod with a reduction in principal might be profitable. The issue with a loan mod (and/or a short sale) is that the lenders want the original borrower’s financial statement and evaluation of their ability to pay. If the borrower’s got a lot of income, assets and cash, you’re screwed… (and so is the original borrower) Just saying.
We’re better off taking title, renting the house out, putting it up for a short sale, and waiting. Meantime, we collect all the rents, regardless of what the bank eventually accepts or rejects.
Thanks for the reply. So you would take title and rent it out without paying on the mortgage? In the meantime you would try to get a short sale approved? What happens to the renter if the bank forecloses? Do you disclose this possibility to the renter when they sign the lease? Sorry for all the questions, just trying to understand. :beer
If the bank rejects the short sale and forecloses, the bank takes the property back, but in most cases (that I’m aware of) will honor the existing lease. And yes, the renter should be made aware of an existing short sale negotiation and the possibility that the bank will take possession of the house.
We don’t want the renter to discover this three months in, and then use that as an excuse to stop paying rent. Meantime, the taxes and insurance are maintained, along with maintenance of the house itself.
It’s just like a standard rental with management and maintenance in place. The only difference is the pending status of the title, which doesn’t effect the renter unexpectedly.