Here is a flyer that I put together for the Muncy property. The big “I am Facing Foreclosure” will hopefully attract extra attention. I am going down to the property today and will put up a For Sale By Owner sign and put my flyers in the flyer box.
I offer owner financing “takeover my payments” as an option. The flyer includes information on my loans as well as a break down of all the costs to justify the price.
I’m getting ready to list this property on MLS with a flat fee broker for only $249. Of course I will still be offering 2.5% to the buyers’ agent.
The MLS listing and the I am Facing Foreclosure flyer should help me sell the property quickly.
13 Comments
September 21st, 2006 at 5:50 pm
It’s a new paradigm, and everybody who doesn’t buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.
Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.
This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.
September 21st, 2006 at 6:39 pm
It ain’t seller financing it you don’t own it, or at least a large portion of it.
I am sure your mortgages have ‘due on sale’ or other anti-assignment language. Whoever buys from you in this arrangement could be looking at a prompt foreclosure even if they bring the mortgages up to date.
As others have noted, you need some legal advice ASAP. I have friend who lied on a mortgage app in the late 80s, claiming properties were zoned for 12 lots when it was only 8. When the market collapsed, houses sat unsold, and the bank had to take ownership of the money-losing project, a bank executive had to explain to his directors why so much money had been lost. He poked around the file, found the misstatement, and voila, he saved his job by claiming fraud.
The result for my friend? Felony conviction for fraud, six year sentence in federal prison, disbarment, etc.
Go through your notes and find where a real estate guru advised you to apply as a residential loans on your flips. That Guru may be guilty of RICO violations, and you may need to turn him in to save your hide.
September 22nd, 2006 at 1:46 am
When wrapping underlining mortgages the bank has the OPTION to call the note due. They don’t have to and I hear that its VERY rare. If I’m the bank and somebody caught up a loan that was in default for 90 day then I would be pretty happy. As long as I’m getting my interest every month I would not try to foreclosure and incur huge expenses and end up owning a non-performing asset. So banks don’t want to take back property, they want a performing loan. As long as the buyer understand the potential risk of “due on sale” clause then everybody is happy.
September 22nd, 2006 at 3:10 am
1. have you seriously worked out whether it would be financially worthwhile for a buyer to buy a house, whether for residence, investment, or speculation, under a wraparound like this? A seller-finance ‘wraparound’ where the seller is merely trying to protect his credit? Why should a buyer pay a premium for that when the market is trending downward?
A smart buyer will just wait and buy it cheaper. Maybe there is a greater fool trying to squeeze into a house where you have so conveniently committed fraud so the buyer does not have to. Good luck finding hem/her.
2. Either this site is a put-on, or you are in serious denial here. Whether the bank is getting interest or not will not matter much when a bank examiner goes through your file and tell your lender to dump this sort trash at a loss or drastically increase their reserve requirements.
As a debtor you have to remember that you are a very small person. When the big guys start to sink they will not hesitate throw the ballast overboard.
September 23rd, 2006 at 7:06 am
Tulkinghorn’s comments are well worth reading a 2nd time. I can tell he’s someone who knows what he’s talking about. I want to emphasize one thing on the wrap-around aspect as well. You are right that a bank does prefer to defer foreclosure if there is any alternative short of the loan sitting in non-performing status for an extended period. However, when a seller is successful in finding a buyer willing to accept the risk of the due on sale clause, if the bank finds out the “seller” got any cash in the transaction (and the recorded act of sale will have to state $xxxx cash and the assumption of xxxx mortgage), watch out! That’s when they lower the boom on everybody, and guess what? They have the legal right to pursue the buyer (who, if he’s smart, will insist on placing the property in an otherwise asset-less limited liability corporation, LLC, so that all he loses is the property and the cash he put up — the LLC will have no other asset to pursue), and you as well once their ultimate loss is known after disposition of the property. They will also vigrously pursue you for any cash you got on this wrap-around arrangement. In short, you will seriously hack them off once it’s uncovered. This is why most sellers trying to facilitate such an arrangement do so highly secretively and hope the lender doesn’t uncover it (and they rarely do until well after the fact). Taking out a website openly stating you’ll do it isn’t compatible with that strategy. Again, I want to reiterate that Tulkinghorn’s comments are worth reading a second time.
September 24th, 2006 at 11:14 am
I am sorry you are having to go through this. You are not alone. This is just the beginning of the era of foreclosures.
What I don’t get is why the lenders have been allowed to make such high risk loans. Last time I saw this cycle, banks had to close their doors because there were so many foreclosures. I am afraid this time will be much worse.
I was submitting 200 page packages for sellers to the Lenders to take less than what was owed them. They gladly took the offers from the buyers because if they waited any longer to go through the expense and time of a foreclosure and then have to turn on the utilities, maintain the property through escrow, deal with vandalism, etc. it would have cost them more money in the long run.
If these are purchase money loans, then I don’t believe you will be liable for the amount lost. (without reading your individual situation)
Anyone who has refinanced their home is now liable for the amount the lender loses. They can be 1099′d for the loss and have to pay back what is owed the lender.
I have not read your story, so I don’t know your individual situation.
I do think the “fun” times have gone on for way too long and now many many people will be devastated. I hope the lesson learned will be there is NO free ride. If it sounds too good to be true, it is.
At the top of the market people come out of the wood work with their “Take my seminar and find out how I made millions on real estate.” Now is NOT the time to be buying real estate for investment.
I am advising first time buyers that I don’t have a crystal ball, but it is my humble opinion that properties are going to drop quite a bit and how are you going to feel if this home you saved so hard for is now worth $100,000 less?
Good luck to you and please don’t forget this lesson. Cash is king! Don’t use your credit cards. This is also another trap. When you finally get to purchase a home, make one extra payment in January and you will pay off that 30 year loan in just 18 years.
September 28th, 2006 at 6:25 pm
[IMG iamfacingforeclosure.jpg]
October 6th, 2006 at 7:29 am
The banks is almost certainly going to exercised the due-on-sale clause. The reason is because right now their loan is secured against that house. If you fail to make payments, they can take the house away from you and get some of their money back.
When you sell the house, the loan is now unsecured. If you fail to make a payment, the bank can only come after you personally (and they’re almost certain to get very little money back).
With the collateral out of the picture, they are going to want their money back.
October 11th, 2006 at 2:47 am
italics
October 11th, 2006 at 10:43 am
$7567 for your equity? Are you serious? In this housing market? BHAHAHAHAAAAAAWAHAHAAAAAAA
October 11th, 2006 at 2:27 pm
why is ‘equity’ listed on the buyer’s list of things to pay for?
October 11th, 2006 at 3:55 pm
Landlord said above:
“The banks is almost certainly going to exercised the due-on-sale clause. The reason is because right now their loan is secured against that house. If you fail to make payments, they can take the house away from you and get some of their money back.
When you sell the house, the loan is now unsecured. If you fail to make a payment, the bank can only come after you personally (and they’re almost certain to get very little money back).
With the collateral out of the picture, they are going to want their money back. ”
This is just plain FALSE!
Sure, once someone sells a house, and leaves the loan(s) in place, that were taken out originally in their name, that barrower no longer has a claim on the house.
However, the lender, who made the loan, still has the collateral to go after, as well as the original barrower.
So, anyone holding an interest in the house, AND the original barrower on the loan(s), WILL be name in the foreclosure suit.
Should you choose to sell the houses and leave the loans in place, that is your perogative, as its your property.
There are of course some risks, and they need to be dealt with.
The due on sale clause being one of them.
This is the clause within most mortgages and deeds of trust that gives the lender the right and option to call a loan due in its entirety, should title transfer, without the lenders prior written consent.
The risk behind the due on sale clause can be dealt with rather easily, provided the payments are of course current, and remain so.
For info on dealing with the due on sale clause, don’t take my word for it, check out this article, written by an attorney…………
http://www.legalwiz.com/freear.....sale.shtml
Good luck to you, market HARD, and sell the houses, on terms, to break them even and go work that job.
Should you EVER buy another property, for investment or otherwise, remember, make your money when you buy………..meaning, for WELL below TODAYS value.
Speculating is NOT investing.
December 11th, 2006 at 11:44 am
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