Hi,
I just had a lead come through which seems to be a "classic Legrand scenario"…the only problem here…the owner is being foreclosed on and the eviction is scheduled for Monday next week (in 4 days from the time of this post).
This is a first deal like this for me and I am not sure if there is anything I can do at all in such a short period of time. Would appreciate any and all thoughts you may have.
The house is located in Toronto (Scarborough). According to the owner it appraised for $290,000 in November 09. (To be verified).
1st Mortgage $142,000 – monthly payment $1150 (3.5% up for renewal in July 2010) – payments are current.
2nd Mortgage $95,000 Line of Credit – Monthly payment $1,000. 18% interest, being called in by the bank. Owner is $8,000 behind on payments and the bank had called in the LOC. If she pays the $8,000 she is behind on, the bank will give her more time.
The family (the owner and her husband) hit a rough patch, had numerous deaths in the extended family, then she got sick and lost her job, the husband bailed and she is now alone and has no income to support the mortgage payments.
She had a consumer proposal in 2007 so her credit is ruined (she figures her FICO is around 400) and it is highly unlikely she will be able to renew her mortgage for the next term in July 2010.
The matter is further complicated by the fact that her husband is on title but she does not know of his whereabouts and she may or may not be able to locate him quickly.
I only see two options at this stage:
1) Talk to the 2nd mortgage holder and see if I can slow down the foreclosure process (never dealt with it before, don`t know if its at all possible). If successful, bring their payments to current, which will buy time, and secure my interest in the property. Then sell the property to a cash buyer and return some equity to the owners and keep some.
2) Alternatively, if successful in slowing down the foreclosure, I can try to buy them out at a discount and either flip the property or keep as a long term buy and hold with my own financing in place or try to get a lease option buyer in.
If anyone could share thoughts on dealing with the bank in this situation, it will be very helpful. On a related note, if there are any other ways that could offer a solution in this situation that I may not have thought of, any and all input will be much appreciated.
Thanks,
Vitaly
I just had a lead come through which seems to be a "classic Legrand scenario"…the only problem here…the owner is being foreclosed on and the eviction is scheduled for Monday next week (in 4 days from the time of this post).
This is a first deal like this for me and I am not sure if there is anything I can do at all in such a short period of time. Would appreciate any and all thoughts you may have.
The house is located in Toronto (Scarborough). According to the owner it appraised for $290,000 in November 09. (To be verified).
1st Mortgage $142,000 – monthly payment $1150 (3.5% up for renewal in July 2010) – payments are current.
2nd Mortgage $95,000 Line of Credit – Monthly payment $1,000. 18% interest, being called in by the bank. Owner is $8,000 behind on payments and the bank had called in the LOC. If she pays the $8,000 she is behind on, the bank will give her more time.
The family (the owner and her husband) hit a rough patch, had numerous deaths in the extended family, then she got sick and lost her job, the husband bailed and she is now alone and has no income to support the mortgage payments.
She had a consumer proposal in 2007 so her credit is ruined (she figures her FICO is around 400) and it is highly unlikely she will be able to renew her mortgage for the next term in July 2010.
The matter is further complicated by the fact that her husband is on title but she does not know of his whereabouts and she may or may not be able to locate him quickly.
I only see two options at this stage:
1) Talk to the 2nd mortgage holder and see if I can slow down the foreclosure process (never dealt with it before, don`t know if its at all possible). If successful, bring their payments to current, which will buy time, and secure my interest in the property. Then sell the property to a cash buyer and return some equity to the owners and keep some.
2) Alternatively, if successful in slowing down the foreclosure, I can try to buy them out at a discount and either flip the property or keep as a long term buy and hold with my own financing in place or try to get a lease option buyer in.
If anyone could share thoughts on dealing with the bank in this situation, it will be very helpful. On a related note, if there are any other ways that could offer a solution in this situation that I may not have thought of, any and all input will be much appreciated.
Thanks,
Vitaly