Re: Any options with this one?

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Posted by Jim V on November 30, 2004 at 23:06:14:

In Reply to: Any options with this one? posted by Jorge on November 30, 2004 at 16:27:51:

: I am interested in a property in my neighborhood that is in the process of being foreclosed upon. The owner bought the house in March in a shady deal (seller advised me they received $380k, buyer financed $450k 1st mortg and $90k 2nd mortg). The owner never made a payment on the mortgage. (A little research revealed that the owner did the same thing with another property purchased two days earlier). The owner has failed to appear in the foreclosure action.

: Are there any steps I can take to attempt to purchase the property at this time? If I can get the owner to go along, would loss mitigation be possible in such a case? What can anyone recommend? Thanks.

Unfortunately, it sounds like you are looking at a case of lender fraud. When fraud has occurred, the lender(s) will often prefer to complete the foreclosure process, rather than participate in a short sale(accepting less than they are owed).

I think it was about 8 years ago, there were a ton of income properties in Los Angeles county that were hugely over-leveraged, with no payments being made, that were all headed to foreclosure. To the best of my knowledge, all those properties ended up in the lender's hands. There just wasn't any way to make a deal happen prior to sale. I've heard Baltimore has had similar issues since then, along with Philadelphia and possibly Chicago.

When the lender takes it back, you can try to work a deal with them.

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Comments:
: : I am interested in a property in my neighborhood that is in the process of being foreclosed upon. The owner bought the house in March in a shady deal (seller advised me they received $380k, buyer financed $450k 1st mortg and $90k 2nd mortg). The owner never made a payment on the mortgage. (A little research revealed that the owner did the same thing with another property purchased two days earlier). The owner has failed to appear in the foreclosure action. 

: : Are there any steps I can take to attempt to purchase the property at this time? If I can get the owner to go along, would loss mitigation be possible in such a case? What can anyone recommend? Thanks. 

: Unfortunately, it sounds like you are looking at a case of lender fraud.  When fraud has occurred, the lender(s) will often prefer to complete the foreclosure process, rather than participate in a short sale(accepting less than they are owed).

: I think it was about 8 years ago, there were a ton of income properties in Los Angeles county that were hugely over-leveraged, with no payments being made, that were all headed to foreclosure.  To the best of my knowledge, all those properties ended up in the lender's hands.  There just wasn't any way to make a deal happen prior to sale.  I've heard Baltimore has had similar issues since then, along with Philadelphia and possibly Chicago.

: When the lender takes it back, you can try to work a deal with them.  


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