REAL ESTATE HELP NEEDED!!: About to Lose House!!

[theunflushables]

Psssttt... Do you realize that a good portion of the people who are going into foreclosure are real estate investors who purchased rental properties including apartment buildings? When they go into foreclosure the Sherriff gives all of the tenants eviction notices.

Just something to be aware of....

Yep, thats what's happening to me. I'm just waiting for the day my landlord gets served telling him I have 30 days. Kind of nerve wracking, but at the same time I'm not paying rent.

I had an idea to buy the house, which according to my landlords wife it can't be worth more than 75k, which not including interest and taxes comes out to 200 something a month over 30 years. Not bad seeing as the whole upstairs could be rented out for probably about 600/month after some repairs. I'm just trying to figure out if there is something that would screw me on this or if it would be a wise investment.

 

[mpimpin]

Yep, thats what's happening to me. I'm just waiting for the day my landlord gets served telling him I have 30 days. Kind of nerve wracking, but at the same time I'm not paying rent.

I had an idea to buy the house, which according to my landlords wife it can't be worth more than 75k, which not including interest and taxes comes out to 200 something a month over 30 years. Not bad seeing as the whole upstairs could be rented out for probably about 600/month after some repairs. I'm just trying to figure out if there is something that would screw me on this or if it would be a wise investment.

From what you have said it doesn't sound like a bad investment, but I can't really say without seeing the property etc.

If you are looking at buying it have an inspector check it out first.

 

[DJKid]

I thought Bankruptcy killed your credit... maybe someone can elaborate on what exactly it means....

 

[Francisco d'Anconia]

Yep, thats what's happening to me. I'm just waiting for the day my landlord gets served telling him I have 30 days. Kind of nerve wracking, but at the same time I'm not paying rent.

I had an idea to buy the house, which according to my landlords wife it can't be worth more than 75k, which not including interest and taxes comes out to 200 something a month over 30 years. Not bad seeing as the whole upstairs could be rented out for probably about 600/month after some repairs. I'm just trying to figure out if there is something that would screw me on this or if it would be a wise investment.

It would be a good investment if there was already a tenant living upstairs who had signed some type of long term lease. A lot of people buy properties which "could" be rented out but end up not being rented because the investor tries to have the rent cover the entire mortgage. It's not going to happen so easily nowadays. The best investments are properties that are already generating some type of income. It makes it MUCH easier to calculate your return on investment.

 

[Bible_Belt]

I thought Bankruptcy killed your credit... maybe someone can elaborate on what exactly it means....

I filed Chapter 7 in 1999. After that, I worked in the mortgage business, basically selling loans.

Your credit report is really only half of your credit. A perfect credit score by itself will not get you anything, unless you have spare income. When someone applies for a mortgage, the lender will look at their debt ratios as well as pulling the credit report. They want usually no more than about a third of your income going to a mortgage, and no more than half going to payments on all of your debt. The problem for a lot of people, especially those considering bankruptcy, is that they have no more available income to take on new debt payments. That means they have to pay every month to maintain a credit report that is not going to help them until they pay off a lot of debt or start making more money, both of which are rare.

However, after filing bankruptcy, a petitioner will suddenly have a lot more disposable cash, because he does not have to keep making payments. Within six months, a bk filer can start getting credit on less favorable terms - but still better than the nothing he could get while loaded down with payments. After about two years, especially if he's smart about building it back, a bk filer could have pretty good credit. I think the way that bankruptcy horrifies people is the result of the way collection agents and credit card companies talk about it. It is horrible...for them, because they don't get their money. Consumer Credit Counseling was actually begun by Visa, and not as some sort of charity. Their job is to talk people out of filing bk so that Visa gets paid.

 

[WORKEROUTER]

well as a mortgage broker for the past five years i can tell you that theres no way you can refinance. you have two options.
a. you can try to get a short sale, meaning that the bank will accept a lower payoff so that you can try to sell.
b. do a loan modification. your lender does not want to foreclose. it costs them way too much money. 85% of banks have a loss midigation department where they will negotiate lower terms and make a payment more affordable so that you can save the house.

in either cases you need an attorney to get anywhere with these banks. pm me for more info as that is what i do, now that the mortgage market sucks.

You don't need to be an attorney to negotiate directly with the lender. I was negotiating with a bank just a couple days ago regarding a recent condo pre-foreclosure.

 

[WORKEROUTER]

Yes they will f*ck up their credit. But I am guessing they owe around $500K and it is now worth $400K. How many investors do you know that will give them $500K for a house worth a hundred grand less. Also, most banks will only give 80% on one loan, so $320K on a house worth four hundred grand. And the days of doing silent seconds, etc.. are long gone. Oh and one other thing is I'm guessing the market there has not bottomed out so this house could still lose another $50K or more in value.

The only chance they have of not defaulting on the loan is to try and negotitate with their lender. The only other options depending on how tight money is would be to get a second job, rent out a room, etc. and try and keep making the payments.

If they are going to let it go back, they may as well let it go back now, before they put even more $ into it. And the sooner they default the sooner they will start building back their credit.

It really depends on the property's data...how much they owe, what the loan was for initially, how much they're behind in payments, etc. There are other options besides direct negotiation, but in my opinion direct negotiation through a seasoned investor is the most capable of providing a solution.

 

[unamean]

You don't need to be an attorney to negotiate directly with the lender. I was negotiating with a bank just a couple days ago regarding a recent condo pre-foreclosure.

thats true you can negotiate with your lender, but 95% of the time they will give you a forberance agreement which means that they increase your payment most times by 175% until you pay back the arrears. this makes absolutly no sense because if you cant afford your regular payment how is someone going to make a payment thats almost double. kind of like a catch 22. with an attorney you can get a much better deal.

 

[unamean]

They might be covered by the new housing bill, i.e. they may be forgiven the part of their mortgage that exceeds current market value for the house, while forgoing 50% of future capital gain. Definitely wait it out until the bill goes into effect. This is part of the bail out of fannie and freddie mac.

this bill was passed already, and bush has to sign it. the dumbest part of this loan is that if you borrow for example 200,000 and you sell it for 250,000 you have to give the govt 50,000. this number goes down 10% each year until 5 years and at that point for the rest of the loan term you must pay the govt 50% of your profit no matter what. so lets say 10 years down the road you sell the house for 350,000, you have to pay 75,000. so basically the only way this loan would make sense is if you lived in the house for 30years without refinancing or selling or you will lose 50% of your profit. this is just another way the govt f**k's you out of your money on top of the capital gains tax and transfer tax. honestly your best bet is to do a loan modification.

 

[DJKid]

I filed Chapter 7 in 1999. After that, I worked in the mortgage business, basically selling loans.

Your credit report is really only half of your credit. A perfect credit score by itself will not get you anything, unless you have spare income. When someone applies for a mortgage, the lender will look at their debt ratios as well as pulling the credit report. They want usually no more than about a third of your income going to a mortgage, and no more than half going to payments on all of your debt. The problem for a lot of people, especially those considering bankruptcy, is that they have no more available income to take on new debt payments. That means they have to pay every month to maintain a credit report that is not going to help them until they pay off a lot of debt or start making more money, both of which are rare.

However, after filing bankruptcy, a petitioner will suddenly have a lot more disposable cash, because he does not have to keep making payments. Within six months, a bk filer can start getting credit on less favorable terms - but still better than the nothing he could get while loaded down with payments. After about two years, especially if he's smart about building it back, a bk filer could have pretty good credit. I think the way that bankruptcy horrifies people is the result of the way collection agents and credit card companies talk about it. It is horrible...for them, because they don't get their money. Consumer Credit Counseling was actually begun by Visa, and not as some sort of charity. Their job is to talk people out of filing bk so that Visa gets paid.

That's interesting... I hear of two types of bankcuptcy, Chapter 7 which you filed and I believe Chapter 11. What is the difference?

In your case since you filed Chapter 7... does that mean you are forgiven for all your debts but can't get credit for 6 months? There has to be other catches to it..... if not that's a great deal!

 

[DJKid]

Home Equity loans sound like a good deal when the market rebounds as well...