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Believe it or not, foreclosure is super stressful for people and very few wish to wait it out to just save the payment money. Also - at least here in CT- lenders have the right to pursue deficiency judgments. So if the home is worth less than what you owe when it forecloses - you can still be sued for the lenders losses. So you trashed your credit, stayed in a super stressful situation for many months, and bam - you still owe the money anyway. Not exactly worth "saving the payments".
My post was in response to a poster who inferred that homeowners in default were wasting away in their homes, not selling despite having equity in the home, for lack of offers by interested, potential buyers.
And that foreclosure timeline in judicial-foreclosure states is often measured in YEARS, not months. Then, even IF (and that's a massive IF) the lender comes after them for a deficiency judgement, the former owner can file bankruptcy for the most-minute fraction of a percentage of paying it... almost definitely well less than making a single mortgage payment. BK for a sole debt doesn't do the damage you think it might. If they file for BK before the foreclosure sale, that also stalls the process of foreclosure. And you don't need credit for much with several years' worth of mortgage payments (or even a lesser amount because of a hardship x months) being saved to pay cash for everything.
There are two options for sane homeowners in default who have *any* equity:
1) Sell because there is enough equity to leave the situation financially unscathed. (Or an acceptable-to-them level.)
2) Don't sell because there is more value in waiting out the foreclosure process (and saving those mortgage payments) than selling.
All the others are not people with whom you'd want to do any business. Sane, normally-affected people do not allow their homes to go into foreclosure when there are better options.
You seem to have some knowledge in this arena so I'm a little surprised at your post, especially how you can determine s person's sanity.
How about a person whose spouse is over seas and they have a gambling problem? The over seas spouse and breadwinner evidently controlled the money too. Anyway house foreclosed on and the prior homeowners lost $500,000 in equity.
You seem to have some knowledge in this arena so I'm a little surprised at your post, especially how you can determine s person's sanity.
How about a person whose spouse is over seas and they have a gambling problem? The over seas spouse and breadwinner evidently controlled the money too. Anyway house foreclosed on and the prior homeowners lost $500,000 in equity.
It does happen a lot more than you would think.
How would a potential buyer walking up to the door have changed that though?
And the homeowner only needs to request the profit from the former lender. I judge by actions; insane behavior - like giving up half a million dollars for no reason - is, imo, a valid reason to question sanity.
That's what I'm afraid of. I don't want to kick someone when they're down, but I would think it would take some pressure off if they knew someone was interested in taking the house off their hands.
I sold a house that way years ago. I lost my job, my husband had moved across state....I had no idea what to do. I put a sign on my porch....Sold it to the first guy that asked.
Short sales take months....I would do it differently now. I'd FSBO and pay off the mortgage.
So, consult your RE attorney, get your ducks in a row and then....Yeah stop and ask....
Or make up a flyer stating what you'd pay for their home and leave it under their door.
How would a potential buyer walking up to the door have changed that though?
And the homeowner only needs to request the profit from the former lender. I judge by actions; insane behavior - like giving up half a million dollars for no reason - is, imo, a valid reason to question sanity.
Well, you may have a point. The Wife had a refinance on the table and could have saved the house but didn't want to pay 12% interest. The high interest rate was because of the mortgage lates but come on foreclosure or 12% until you sell the house.
As far as the overage going to the former owner that is true only up to the amount bid at the sale after all fees. The house went to auction for $990k, my winning bid was $1,185,000. After fees they only got 52,000. The reason I stated they gave up a half a million was because what I sold it for on the open market.
You have to know what you are doing. Often a homeowner underwater can walk out with a few grand, and you can make quite a bit.
If they have a second mortgage, put on a mechanics lien and redeem as a third in line lien holder. I paid $4000 to a homeowner to get a $150 mechanics lien. Then I (and a partner) made $54K in 6 weeks.
Buy a nonperforming contract for deed from the holder at a discount, and cancel the contract for deed. Even if there is an IRS lien on the property. I picked up a house for $38K, put in $30K + some sweat, and am going to list this week for $174,900.
Have the seller give you the deed. Then get rid of any second mortgages or IRS liens. Same as above.
There are lots of ways. Most people only know how to contact a realtor and buy on the MLS.
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