Brother’s house in foreclosure and worse?

[blue_sky]

Hair salon can be a great business. My brother owns one, almost no hassle and he has great employees, makes a good monthly nut off it too. On the other hand, he’s not a flake, whereas the previous owner was. She started the place with her rich husband’s money for something to do. Then she forgot to remit sales tax for a couple years…

People are fun.

[temeculaguy]

It may be too late, a good realtor may have helped him a few months ago if there was equity and credit to be saved but he is less than 30 days away from the foreclosure sale of the first and not much time to market, sell and close the deal without a drastically reduced price in search of a cash buyer. My guess is that the lenders won’t be in much of a mood to make a deal if they’ve been ignored for ten months. They don’t really want to foreclose, they just want their money but they have been given no option. R/E attorneys cost money and it doesn’t sound like he has any. If the sale ultimately ends up making both lenders whole and there is some left over he can get it but the problem with Zillow and comps from a few months ago is they are behind in a rapidly declining market and even if someone thinks it is worth a certain amount nothing is selling for than right now.

I was looking at one that went up at 200k below market with 20 days before it foreclosed and it wasn’t a short sale they actually had the equity. I didn’t have enough cash to write a check and apparently nobody else did because the bank took it back and my guess they will list it at just enough to make themselves whole and it will sell in a few days, it’s not their job to make some walking money for the defaulted borrower. I kept asking myself why didn’t they try to sell two months ago, giving buyers time to secure financing because they would have sold it.

[temeculaguy]

It may be too late, a good realtor may have helped him a few months ago if there was equity and credit to be saved but he is less than 30 days away from the foreclosure sale of the first and not much time to market, sell and close the deal without a drastically reduced price in search of a cash buyer. My guess is that the lenders won’t be in much of a mood to make a deal if they’ve been ignored for ten months. They don’t really want to foreclose, they just want their money but they have been given no option. R/E attorneys cost money and it doesn’t sound like he has any. If the sale ultimately ends up making both lenders whole and there is some left over he can get it but the problem with Zillow and comps from a few months ago is they are behind in a rapidly declining market and even if someone thinks it is worth a certain amount nothing is selling for than right now.

I was looking at one that went up at 200k below market with 20 days before it foreclosed and it wasn’t a short sale they actually had the equity. I didn’t have enough cash to write a check and apparently nobody else did because the bank took it back and my guess they will list it at just enough to make themselves whole and it will sell in a few days, it’s not their job to make some walking money for the defaulted borrower. I kept asking myself why didn’t they try to sell two months ago, giving buyers time to secure financing because they would have sold it.

[Bugs]

Sorry about your brothers house and his business. Thanks for answering my query about the business. A hair salon isn’t the type of business that is overly dependent on RE, so we can’t blame a weak market on that failure.

[Bugs]

Sorry about your brothers house and his business. Thanks for answering my query about the business. A hair salon isn’t the type of business that is overly dependent on RE, so we can’t blame a weak market on that failure.

[gn]

the holder of the 2nd/HELOC foreclosing would serve no other purpose other than puting themselves in a better position to light a fire inder the 1st leinholder in hopes of getting the house to market and sold quickly

El Jefe, thanks for the information. The foreclosure process costs money. Are you saying that the amount spent on foreclosing is small enough & worth the benefit of getting the 1st lienholder to act quickly ?

[gn]

the holder of the 2nd/HELOC foreclosing would serve no other purpose other than puting themselves in a better position to light a fire inder the 1st leinholder in hopes of getting the house to market and sold quickly

El Jefe, thanks for the information. The foreclosure process costs money. Are you saying that the amount spent on foreclosing is small enough & worth the benefit of getting the 1st lienholder to act quickly ?

[gn]

my guess they will list it at just enough to make themselves whole and it will sell in a few days, it's not their job to make some walking money for the defaulted borrower

temeculaguy, when you said "enough", you meant enough to:

1. Make themselves whole, and

2. Cover the late payments, foreclosure fees & broker fees

Right ? You said you didn’t have enough cash, can’t you buy it from the lender (as an REO) using conventional financing ?

I was looking at one that went up at 200k below market with 20 days before it foreclosed and it wasn't a short sale they actually had the equity 

For a buyer who has the cash and wants to own as soon as possible but is wary of the downside potentials, the listing mentioned by temeculaguy might be an ideal purchase.

I'm wondering. How often does such an opportunity come up ? My guess is: rarely. But, maybe someone know more about this. Any comments ?

 

 

[gn]

my guess they will list it at just enough to make themselves whole and it will sell in a few days, it's not their job to make some walking money for the defaulted borrower

temeculaguy, when you said "enough", you meant enough to:

1. Make themselves whole, and

2. Cover the late payments, foreclosure fees & broker fees

Right ? You said you didn’t have enough cash, can’t you buy it from the lender (as an REO) using conventional financing ?

I was looking at one that went up at 200k below market with 20 days before it foreclosed and it wasn't a short sale they actually had the equity 

For a buyer who has the cash and wants to own as soon as possible but is wary of the downside potentials, the listing mentioned by temeculaguy might be an ideal purchase.

I'm wondering. How often does such an opportunity come up ? My guess is: rarely. But, maybe someone know more about this. Any comments ?

 

 

[temeculaguy]

GN, Yes. I meant that they have no concern for making her brother any money and when I see foreclosures list they seem to be based on what was owed, all the back interest, taxes, selling fees, legal fees and agent commision, figure it out and that’s what they will take. They won’t stay on the market for one extra day to save the comps or make money for the borrower (which they are entitled to if there is profit.)

I see alot of repos make it to the MLS that are over the comps and I came to the realization that they aren’t picking a price based on what a normal seller would, they are using their spreadsheet of what they have in it to decide pricing, then when it doesn’t sell they adjust downward until it sells.

The people accross the street moved out last week but they were upside down so I’ll just wait to see what that one lists at. Has anyone here ever contacted the lender on a repo before it gets on the mls? Is there a benefit to that?

[temeculaguy]

GN, Yes. I meant that they have no concern for making her brother any money and when I see foreclosures list they seem to be based on what was owed, all the back interest, taxes, selling fees, legal fees and agent commision, figure it out and that’s what they will take. They won’t stay on the market for one extra day to save the comps or make money for the borrower (which they are entitled to if there is profit.)

I see alot of repos make it to the MLS that are over the comps and I came to the realization that they aren’t picking a price based on what a normal seller would, they are using their spreadsheet of what they have in it to decide pricing, then when it doesn’t sell they adjust downward until it sells.

The people accross the street moved out last week but they were upside down so I’ll just wait to see what that one lists at. Has anyone here ever contacted the lender on a repo before it gets on the mls? Is there a benefit to that?

[lonestar2000]

Unless I’m mistaken, proceeds from a sale of a foreclosure first go to satisfy fees, then the first, and if anything is left only then does the second get paid.

Which means that it is doubtful the second will get anything, requiring the lender on it to let the loan go (writeoff) or sue your brother.

In either case his credit is shot, and purchasing (or even repurchasing the same house) is a near impossibility as nobody will give him a loan.

I’m no financial expert, but perhaps a bankruptcy would be his best option at this point?

[lonestar2000]

Unless I’m mistaken, proceeds from a sale of a foreclosure first go to satisfy fees, then the first, and if anything is left only then does the second get paid.

Which means that it is doubtful the second will get anything, requiring the lender on it to let the loan go (writeoff) or sue your brother.

In either case his credit is shot, and purchasing (or even repurchasing the same house) is a near impossibility as nobody will give him a loan.

I’m no financial expert, but perhaps a bankruptcy would be his best option at this point?

[Author]

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