I need help with a friend of a friends foreclosure. I have offered to work the short sale but ran across a situation I am unfamiliar with. Here are the details I know.
assessed val:$714,000 desirable area in Seattle worth 750K+ ARV
4+ Bed/ 2 1/2 Bath 4000 sq. ft
First mortgage orig balance($614,000) with Greenpoint was refi in 5/2004. Try to discount 80% minimum.
1st payment P+I. is 4356.42 with interest rate of 7.625% no payments since 8/2004
2nd Mortgage(HELOC) also with Greenpoint owed is $117,280
monthly payment $1,050 -9.5%. Should be able to discount 50%.
3rd lien is a promissary note held by a contractor that was paid half of what was owed with the refi. Owners signed a promissary note for remaining $56,600 owed to contractor. He recorded the note. Escrow company messed up and recorded the two mortages weeks after close which put the contractor in first position.
Greenpoint started the foreclosure. The contractor won’t budge because he is under the assumption he will get all his money if it goes to sale.
The only reason I am cosidering a SS is this is a HOT area. The house does need updates. The homeowners hired the contractor to build a state of the art basement but ignored the 30 year old kitchen and left main bathroom unfinished so lender may discount especially on such a large loan.
My question is what happens to the contractor in foreclosure. Would it be worth it to get him to discount or even partner with me and we sell the house?
The homeowners don’t want anything to do with the house and were planning on Vacating before the sale.
P.s. I live in Chicago. The house is in Seattle. I was going to use a private lender for purchase and hire a realtor to sell unless there are better suggestions.
Sorry for the long post but I wanted to add as much info as Possible.