Question on Foreclosures!! Please help

It is already a REO if it is Fannie Mae's name. Now it will be listed with a REO broker, after the BPO are done & priced accordingly, & it will be higher than you'll want to pay because they first are looking for owner/occupants. After 30 days they do a small price drop, but Fannie Mae usually expects 120 days on the market & will only discount 5% to 10% off the listing price(at least here in Fl.) We have bought about 18 Fannie Mae properties & each one gets harder to deal with; then there is a deed restriction for 90 days, you can only sell it for 20% above what you paid for it. The POF must be in your name & if they are now like the Freddie Mac properties, they don't even allow 3rd party funding, such as transactional funding companies. It's much easier to assign a private deal.

Same thing here in Colorado.

Gabriel, like Gary said, it is much easier to assign a deal from a private seller. 99% of the time you can't assign an REO. You can sell the LLC or the trust you make the offer in however.

On this deal you would have had to contact the seller BEFORE it went to auction and try and negotiate the deal directly with the distressed homeowner. Sounds like Fannie Mae has it now. If the property is still in the sellers name, maybe it has not gone to auction yet and you can still contact the seller. However as soon as it goes to auction and the lender takes it back (if no investor buys it at auction) it immediately becomes an REO. You can still track it and make an offer as soon as the bank lists it.

Also, my company is looking for some fellow wholesalers to work with on the ground in Tampa. If you are interested, drop me a PM with your contact info.

Michael

Thank you guys so much for the info. Its amazing what experience can do for you. Just by reading my post you guys already knew all about it. Thanks again and I will be in your shoes soon!

As it turns out, you cannot assign a REO. The lenders do not allow it. The only way to wholesale an REO is to do a double close. Additionally, you must wait until the lender lists the property with a real estate agent. This can take months and sometimes even years.

Depending on where it is in the foreclosure process, you maybe able to contact the property owner and find out what the payoff to Fannie Mae is and quickly put together a deal before it goes up to auction. Or if it was auctioned and your area has a redemption period, you could work with the owner to redeem the property and wholesale it afterwards.

You can actually do both of these type deals using a single closing. No need to double close. How you ask? By selling the LLC or the Trust the property is held in! No worry about deed restrictions etc. How you ask? Because the entity that made the original offer stays the same. Only the "ownership" of the entity changes!

Hope this helps,
Michael

I have a similar situation with a property that that now has an auction notice on it, but the auction is not until October 2014. So, are you saying that up until the day of the auction I can still make a deal with the owner as long as the deal is effectuated prior to the date of auction? If that is the case, who is putting the house up for auction, the bank (if there is still a mortgage)? What about properties that don't have a mortgage? Is it the city that takes control of an abandoned property and can then auction it?

Thanks

First Foreclosure would like some advice on how to work with the buyers?

yes you can work with the seller of the prop before it goes to auction & yes if the prop has a mortgage then the bank who issued the mortgage will foreclose on the hm & auction it off.

If a hm owes back prop taxes usually 3yrs then the County will be taking the hm but that is a diff process in wich they sell tax liens & others can explain that further.

More info please, what do you mean more info on how to work with the buyers? You put the prop under contract then wholesale it to your buyers. What specifically are you talking about?

You usually need a couple of weeks BEFORE the auction to get everything in place. You can stop the auction on the day of the auction provided the seller and their lender has approved the purchase.

If there is no mortgage the property won't be auctioned at the foreclosure auction. Maybe a tax lien.

Michael

Thanks for sharing what a very lively disclussion, thanks, Jim

That is true, though you can stop the auction the day of if the mortgage is paid off including all fees, fines and penalties, it usually is best to give yourself some room as lenders love to drag their feet every step of the way.

I have seen accepted purchase agreements approved through a short sale but the property still being put up for auction. Department A "forgot" to inform Department B.

Along the same lines as this conversation, I have come across a property, 3 beds, 2 baths, 1,440 sq. ft., that would make either a good rental or lease option.

From what we can tell there is very little work to be done other than cosmetic. Owners placed posts for a chain link fence but never got the chain link up. Easy fix. The front yard could use some curb appeal. The tile in the living room and hallway needs to be replaced with wood/laminate flooring or carpet. Not a huge area, maybe 100-120 sq. ft. (On a side note here, we have not actually been inside the home, all we can go on, at this time is just what we were able to view through the windows, which is a large portion of the house. We understand that we really need to get in the house to make a more sound judgement.)

We were told by a neighbor that there is a new furnace, interior doors, painted inside & out, windows, and recent roof.

This house is within walking distance to a private school, the middle school and the new elementary school set to open next year.

In doing a preliminary search, the house is still listed in the owners names at the courthouse when you do a parcel search. However, when you search the newspaper it showed that the home was to go to auction back on April 24, 2014. And the house has letters posted with contact info for an attorney's office.

So I guess my questions are who do you talk to about this home, the owners, the attorneys, mortgage company? And what would be the next step? Can we call the attorney's office to get access to the home for a walk through?

I'm just stuck! And don't know which way to proceed. I know at this point this house has the potential to be a good deal if not a really good deal. And it needs to be my good deal...lol!

So if anyone has any ideas, suggestions, willing to walk me through this, I'll take all of them!

One more thing I learned from my research is the bank holding the loan for this property was ordered to pay $37.5 Million for Blocking Mortgage Borrowers’ Attempts to Save Their Homes. Could there be some type of hold on this property because of this action?

Thanks,
P. Allen

First, you should do a little title research and find out how much was mortgaged and for how long. Is there only one mortgage or a second.

From there, contact the owner. The lender cannot talk to you about the house if they do not own it. You need to go through the owner or their agent. See if they are willing to sell and then find out how much they owe with interest, penalties etc.

If the payoff is within reason, then submit an offer to the seller and get a payoff settlement from the lender. Close like normal. If it is too high, then you will have to work on a short sale or wait for the auction.

Thanks campbellsimon.

"Wait for the auction", the auction is part of the confusion. According to the newspaper this property already went to auction back in April of this year.

Contact "agent", there is no agent sign on the property nor can I find a listing on the property. The only thing I can fine are the papers taped in the window with an attorneys office listed on it. I'm assuming this attorneys office is handling the foreclosure.

Doing a "title search", a little clarification please. Are talking about using a title company or driving into the county seat? I can tell you from experience, the people in the court house would not allow to look at documents on a different property I was interested in stating that they believed my research constituted solicitation and by the laws of this state they could not allow me access since I have no binding legal interest in this property i.e. no contract on the property.

Can't the lending company or the attorneys office verify if the property is an REO?

Thanks,
P. Allen

If the property is an after auction property then you maybe looking at a redemption period - depending on the state it is located in. Often states give the original owners a time period to redeem the house. The auction buyer cannot do anything with the house until the redemption period passes.

If that is the case, you could contact the original owner and offer them a small cash offer if they will redeem the house using your money. You should have a purchase agreement showing your interest in the deal.

Thanks campbellsimon. Now that answer opens another question for me.

In Dean's book "Profit From Real Estate Right Now!" where he is talking about the 24 hour script, it asks about a Sherrif's sale and if the bank has sent the home owners a list of additional expenses for the foreclosure. Is that the reason these questions are asked, to identify a possible redemption period?

Thanks again,
P. Allen