Urgent! How can I stop or postpone a foreclosure sale

[phialove]

I need some advice asap.

How can I postpone or stop a foreclosure sale for my homeowner's, to give me enough time to purchase their home from the bank?

[wheelema]

Ask.  Explain in a clear a manner as possible exactly where the value of the home is in the marketplace to the lender, and proof of your financial wherewithal to purchase.

Document the home's condition... hopefully it is less than pristine... and with realistic comps it's value in the marketplace.  Get the deed, do the paperwork, pray.

The foreclosure can be delayed if the lender wishes.  Show them that it is in their best interests to do so.

[kikaider69]

Did you get the homeowner to sign the 'Authorization to Release Information', as you know the lender wont talk to you unless you fax it in.
steve

[phialove]

Yes I do have authorization to speak with the bank.
I am doing alot of praying!!!!!

I was told by the bank that I coud bring the loan current and that would stop the sell. So if I bring the loan current, can't I still turn around and resend them a short sale offer? The 2nd loan is still in default.
Any ideas?

Thanks!

[wheelema]

Ouch.

If your intent was to purchase this property as a short sale than my gut tells me that you have lost it.

What follows is from a rank amateur, so take it with salt.

When pursuing a short sale you talk with no one but loss mitigation... there is no reason to talk to anyone else.  Your goal is to bring LTV to a point where the property is attractive to an investor.  Even if YOU are the investor... a fact that you NEVER disclose to the bank!!

In a short sale you need to negotiate the second down to pennies on the dollar.  Subordinate lenders often won't see a dime after the property is auctioned so they should be rather motivated.

If the primary lender is playing hardball and telling you that the only way to stop the sale is to bring the loan current then I really question whether you are talking to Loss Mitigation.  I would expect that rhetoric from Collections.

I would NOT bring the loan current.  You are throwing your money away.  I am assuming if you could buy the property for the current amount owed you would do so.  I am also assuming that you cannot purchase the property at the auction for cash.

If the bank will not send a short sale packet or negotiate then the only recourse you have left as far as I can see is to attend the auction and talk to bank immediately after it closes... assuming the bank gets the house back.  This action will, of course, screw the current homeowner, so if your intent included saving their credit to the greatest degree possible you failed there.

It all depends on whether or not the bank will deal with you.

Luck.

[gccre]

You need to find out exactly where the homeowner is in the default process. Do not bring the loan current like the bank wants you to do. If the property goes into foreclosure it's a very expensive process for the bank so naturally they want you to pony up and get the house current.
You'll neg. with both lenders (1st & 2nd) seperately. Is the homeowner behind already on payments? If so you can negotiate with the 2nd lender and get them to accept .10 on the dollar. If the homeowner is in foreclosure they'll be lucky to get anything so they'll accept your offer. Ex: If the homeowner owes $20k on his 2nd, offer $1500 to settle (you can always go up but they'll take .10 on the dollar)
Next pursue the primary lender and start at .50 on the dollar.
You can find a ton of into *free* online on the short sale process w/out spending $600 on some course. These forums are great. Do a search on Google as well.
It'll take you every bit of 60 days+ to do a short sale and depending where the homeowner is in the foreclosure process, time is of essence. And ask lots of questions on the forums if you're unsure about certain procedures.

[phialove]

I have been talking with loss mitigation (I'm sure).
As I stated before, the 2nd took my short sale offer.
The 1st told me that they would take my offer as well, but that they were not going to stop the sale (which made no sense to me). They sent me a print out of how much it would cost to bring the loan current.
$13,000- which, $10,000 would go to P & I and $3000 towards legal fees.
They said that was the only way the sale would be stopped. I figured I would be able to purchase the home after I stopped the sale and save the HO credit.( I have my financing in place, but it'll take 2 weeks for everything).
I have spoken with the highest person in loss mitigation and they are not trying to work with me. I have supplied them with all the proof of the slow market, repairs etc. in the home and they are not trying to hear me.

It's not offer until God says it's over.
I believe by faith that I will be writing you all back a victory report this week.

Thanks for all the advice again!!!  

[swgprop]

If you reinstate the first on behalf of the mortgagor, what guarantee do you have that the homeowner will consummate the transaction with you?  In part of your post you state that the 1st will take your offer, then later "they are not trying to work with me".

Tread carefully, faith is no substitute for solid contracts, agreements, etc.

[chadnab]

Depending on how far into the process the seller is you can talk to a lawyer and for roughly a couple hundred dollars they might be able to file a six month extension on the judgement.  Then the bank can not send to property to sale for a least six months.  In Iowa, where I am its usually 20-40 days from the time the current owner was served the judgement papers.  You can look on the county recorders site in you county to see if the judgement has been filed yet.  Good Luck!

[phialove]

Yes, the 1st led me to believe that they were going to accept my offer. They said that the offer looked good and sent it to an underwriter(already knowing the value of the house, because they had an BPO done prior to me meeting the HO).
After they ordered a BPO for my offer, they started playing games with me when the BPO came back.

That's why I said at first they were going to take my offer and now they are giving me a hard time.

They don't want to take a short sale on the 1st, only the 2nd would accept a short sale of $1000.

Regarding the contract etc. I have the HO under contract, authorization to release info, POA over the property etc.

Most of all I have FAITH, because faith is the substance of things hope for and the evidence of things not seen.
Without faith it is impossible to please God.
 
Thanks!

[gccre]

Tell the bank the homeowner is contemplating filing for bankruptcy. That should get their attention. The bankruptcy filing would delay the foreclosure and the homeowner would stay in the house up to a year -free and no bank wants that to happen especially with the risk and considering the homeowner already hasn't been maing payments so a whole nother year is extremely costly to the bank.

I'm not an attorney and I'm not suggesting you tell the homeowner to file to bankruptcy. You could get in trouble for that if you're not a licensed debt relief counselor but you can plant the seed with the bank and see if that gets their attention to work with you on the 1st mortgage or tell them they risk losing $1000's more over the course of the next 12 months if your client decides to file in missed house payments and break it down for them so they can actually see it in black and white like this example:

12 missed house payments = $12,000 +/-
current past due payments = $4000 +/-
current legal fees = $2500 +/-
future legal fees = $10,000+/-
back property taxes = $3000 +/-
misc holding costs = $2000 +/-
then....
6 mos of holding costs once owner vacates next year before they resell = $5000-$7000 +/-
Future Property taxes = $3000 again +/-
Property Ins = $1000 +/-
Lawn service to maintain lawn while house is vacant so property doesn't receive any city/township violations = $60 mo x ? months = ?
PLUS if the house is lien is $100,000, the bank MUST set aside and not touch 8 times the value of that $100,000, which means they cannot loan out $800,000 which means they collect no interest on it which means they get penalized by the Fed Bank lenders so it is EXTREMELY costly for a bank to go through a foreclosure process when its all said and done.
So ballpark figure for 12 mo. bank expenses if bank doesn't negotiate a short sale with you and instead chooses to hold out and sit on the property =$45,000+$800,000 they can't lend = priceless leverage for you.

*the house prices above are just guesstimates but you get the idea...add to the list any misc expenses I forgot and pad the figure a reasonable amount to make your case but itemize them so they see the actual breakdown how you came up with those figures and once they see the total at the bottom for 1 year of sitting vacant they'll wake up. Or not.

Did I miss anything?  Get the picture?  Your job is to convince the bank it is in their best interest to work with you or they stand to lose awhole lot more in the long run than they already are.

Best of success



 
 

[phialove]

gccre!

Thanks for taking the time out to break somethings down for me.

I really do appreciate it!

God bless you!