Thread: 1st time Buyer question on PreForeclosure

Hello Brian-

You have a good idea - but you should have done this BEFORE entering into your present contract. But don't feel too bad - because executing your idea would be difficult at best. If the mortgage service provider is a local bank - your odds of success just went up. If however the mortgage servicer is a large regional or national firm - then your in for a very frustrating experience. Just trying to get somebody to talk to you will be a major obstacle - one that is difficult to overcome even with persistence. The problem is the asset managers for these properties usually leave their phone on constant voice mail - and the chances one of them will return your call are not good. These people are handling hundreds of properties at a time - and get pitched hundreds of ideas every week from people wanting a deal. If they spoke to everyone that called them - they wouldn't get any work done. A better bet may be to fax them an complete offer. This offer should include the contract, appraisal or well documented BPO with comps and photos, the home inspection, and a pro forma closing statement. The problem here - they may reject your offer - and never contact you to let you know. If you should go this route - make sure you include a sunset date.

A further problem for you may be the government initiatives and internal programs from the mortgage servicer. Even though the "Notice of Default" was filed a few months back - I can almost guarantee you the mortgage servicer is still tying to contact the property owner to "work something out". If this were in my state - I would guess it would be at least until early next year before this case actually got before a judge - so there really isn't a lot of pressure until then - regardless of the leaky roof and how much rain you get !!

If you want to renegotiate your contract based on the inspection report you should stick to negotitations with the listing broker and seller. If you can't work out an acceptable deal - then walk if you can.

Brian - as some friendly advice -this seems like an awful lot to bite off on your first property. Not because you can't do it - but you can't do it without a lot of frustration and the patience of a saint. If this deal does fall through - look for an easier property next time - maybe needing less work. You sound like a bright guy - learn from this experience and build on it - you don't have to try and make a financial windfall with your first attempt.

Good Luck-
Glenn

As long as the seller is on title, they are going to have to sign off on any deal. Unless there is something that is not being mentioned, you can't circumvent the owner on title. As long as the final amount on the HUD-1 cover the expenses and judgement, there would be no need for a short sale but given the judgement amount and the fees that are most likely beginning to accrue it is possible that you would be looking at an SS even with your price.

If the agent representing the seller has not dealt with short sales before, you may be in for a long and not necessarily successful haul. If you really want the house, go for it but keep in mind that this transaction could go on for awhile.

Thank you both for the valuable insight. I must say that I do love financial windfalls! However I am also not looking for a long drawn out process with no certainty of close.

For now the search will continue.

Thanks again,
Brian