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Posted by PK on August 23, 2003 at 01:23:38:
About 9 years ago i purchased a large amount of rental property with another partner. Everything is 50-50. At that time he was a loan officer so did some "creative financing" which invoved Balloon payments on 3 of the properties. He filed for Bankruptcy last year and included the properties. Approximately 4 months or so before the balloon payments were due, we applied for a re-fi from the current mortage holder only to have it denied because of his bankruptcy. We tried again to re-fi with him coming off title only to find out he also had a couple of state and fed tax liens on the property. The bank again would not re-fi. Balloon payments are not 2 months overdue. Lender called and said they were filing a petition for 'reliof from Bankrupcy" and once that was approved foreclosure process would begin. (60 to 90 days)..here's my big question if anyone can help.. The 3 properties involved have been appraised at 725K. The balloon payments due are 234K. We stand to lose one heck of a chunk of equity. I am retired and a full-time caregiver for my wife. The property was eventually going to be sold to take care of her later in life as she will require full time care... I'm I making a wise decision utilizing every bit of cash savings and the small home equity line of credit I have to pay off these 3 balloon payments? If so I was thinking I would have an attorney draft a promissary note for my partner that the amount he owes me for the payoff would be due upn sale of the peroperties at a later date. After paying these off, I'd basically be left with less than a couple of K to get by. Ithe bankruptcy naturally shows on my credit since these are joint accounts.. HELP and Thanks for any advice
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