Foreclosure stuff

[QC]

My youngest brother is facing foreclosure on his house My Mom and I are trying to help him, but he is being evasive and not facing the reality at this point. As far as I can tell he owes around $450K which is the total of a 1st and a 2nd . . . He is somewhere around $25K behind. Value appears to be around $550 and that is probably conservative. Yesterday my Mom was considering buying it and renting to him, but today she met with him and he is being so casual that she doesn't want to help anymore.

Which brings me to my question. I believe foreclosure has already begun. What stages are there? Does he have any priority in this matter? Could he "sell" the rights to buy the house out of foreclosure? Should he walk away? How can he take advantage of the $100K equity to put him in the best position? Is there anyway he can walk away AND get a portion of that? I am sure there is not enough here, and he is not getting us clear info, but any help would be appreciated.

 

[tommays]

Re: Foreclosure stuff

If it has gone that far they just want to recover there money and NOT hold out for the best price like you would in a normal transaction

There also incurring a LOT of costs VS him selling the house when he still had the chance to walk away with some equity



Tommays

 

[Mike722]

Re: Foreclosure stuff

You might try calling the lendors directly and asking about the property. In order to get a clear title you may have to pay off both the first and second mortages. The only other problem would be if someone else has a lean on the property as well. You might want to talk to a real estate lawyer from your state.

 

[CATransplant]

Re: Foreclosure stuff

Unless there's a CA real estate attorney on this forum, you won't get any useful advice here. That's who your brother needs to be talking to right now.

If he hasn't waited too long, already, as many homeowners facing foreclosure do, then a decent attorney can get things put off a while while he tries to unload this house and recover some of his equity.

Obviously, it seems, he's unable to make the payments, so selling is probably his best shot at coming out on top, but if the wolf is already at the door, there may not be time.

Right now, lenders are on the verge of breaking down a little...they have so many ongoing foreclosures on their books. An attorney may be able to cajole them into waiting a bit, in the hope that they'll recover their capital fully.

Again, your brother needs an attorney. If he won't listen and doesn't get one, then he'll just lose his house. Happens every day.

 

[Drowned Rat]

Re: Foreclosure stuff

Sorry to hear about that QC. If he just walks away, he's going to have a very hard time getting into another house for the next 7 years at least. It might be possible, but the interest would be sky high. Depending on the rest of his financial situation, it may make sense for him to sell enough assets to pay the house up to date and then sell or re-organize. If his situation is particularly dire, bankruptcy is an option, but he would need to get the house paid up to date first to protect it. In AZ anyway, the bankruptcy court can't touch your property assets. So sell the cars, sell the boat, whatever it takes to pay the house up to date and then if he still can't keep up, declare bankruptcy. Don't know if CA has similar laws or not.

 

[KM2]

Re: Foreclosure stuff

With that much equity why hasn't he refinanced to pay off the 1 and 2 with a new mortgage? Many lenders would have offered this when he first got behind. I would still think somebody would do it if he has the income to make the payments.

He may be frustrated, embarassed and feeling hopeless, but if you can get him to sell to you that would be a great solution. Even if he doesn't live thier afterward. If you don't buy it some other investor will. There are a whole bunch of people out their who buy houses in foreclosure or from banks after and then flip the properties for profit. Why not you in this situation.

 

[QC]

Re: Foreclosure stuff

Well the hardest thing has been getting decent info out of him, but I now have authorization in writing to speak with the lenders. I spoke with the scumbags holding the second yesterday and they said that he has already lost the house and title has been transferred. Funny the lender holding the 1st says he has until 8/15 . . .

What I am trying to do is a quick sale so he can get the cash and a fresh start. He can't afford anything and is seemingly spiraling downward. Some cash and the feeling of being out from all of it might just be the best thing for him. He owes some other creditors and family members, so again some dough just might be the ticket. It's gonna be tough, but that's what we are gonna try to do. I actually think the $550K is conservative, so a quick sale may actually be in the cards . . .

Thanks for all of the responses, I'll update for the curious and any other help I may need . . .

 

[QC]

Re: Foreclosure stuff

Well the primary lender did a title search today and the holder of the second sold their interest on June 22nd. From what I understand, this means my brother is no longer the owner and the holder of the first is the only one that holds any sway over the holder of the 2nd. Basically, he has lost it, and he got his first notice of default from the 2nd holder in September . . . What a dummy. Not sure there is anything more to do except verify the above

 

[RCSConstruction]

Re: Foreclosure stuff

People are simply not buying homes right now. Agents will not tell you that, they say it's the best time.... A large percentage of sales are actually foreclosures.
California's housing market is going bust and it has just begun.
Lenders have tightened their belts and it's making the market even worse.
All those shaky loans caught up to the banks. Over 100 mortgage companies have shut there doors and allot of fraud is just surfacing..
Post up over here and these guys could help you out.
http://piggington.com/
Good luck QC

 

[Straightup]

Re: Foreclosure stuff

Well the primary lender did a title search today and the holder of the second sold their interest on June 22nd.

Who bought the 2nd rights? The first? This is odd. The firsts will hold out longer, cause they hold the cards. Sounds like the second got scared of this and sold out. I would be surprised to find out that your brother has lost ALL interest on the house though, as usually there is a sale on the courthouse steps to make that final - unless that has all taken place and the 1st owns it all. At the property sale, the first will bid up until they have at least recouped what they have in the loan (fees and all).

Side note: Please do not take my post as fact. I have only helped a foreclosure investor some so I studied up on foreclosures a small amount.

 

[A.L.]

Re: Foreclosure stuff

Sorry to heard of your troubles - I used to be a paralegal in NYC and I did many a foreclosure for a large bank - If the bank sells the property for more than the outstanding due - including legal fees which will drastically increase the amount due - and the second mtge gets paid, the balance goes to your brother. During the 80's I only saw this happen ONCE. If the CA market is as bad as they say, he needs to work out an agreement with the bank to pay off the arrears over time or refinance ASAP. Otherwise, if the house is sold for less than the balance due, they can sue him for any monies due.

Also, I hate to say this, but I have a friend who tried to help her hapless bro numerous times, then just let him be foreclosed upon and now he has to deal with it himself. He is currently renting and getting his life together.

Good luck

 

[QC]

Re: Foreclosure stuff

Well my understanding is that by the 2nd holder holding their own sale (sold it to themselves) they have effectively got my brother removed from the title. Yes, odd and rare, but legal. The 1st holder now will hold a sale and recover their $ and then the 2nd holder will become whole in the process if they get enough for it. With my brother out of the way, he cannot work out a deal with the 1st holder leaving the 2nd holder to deal with him. Yes, I also understand that if there is any money left over, that my brother is entitled to that. However, I have been reminded by some others that the bank is not in the business of making my brother money, so the likelihood that a sale of theirs would attract more $ than they need to get whole is slim at best . . .

In my brother's case he may in fact benefit from losing this thing if it snaps out of this funk

Thanks for the thoughts.

 

[Straightup]

Re: Foreclosure stuff

This is very interesting. Sounds like the 2nd already had a sheriffs sale. If someone would have bought your brothers property at the sale, they would have still owed the first. I'm only speculating...

 

[Limited-Time]

Re: Foreclosure stuff

Be aware if the selling price does not cover all the expenses, LB is liable for the balance. BTW I've been in your shoes myself QC. Never had I had such a helpless feeling. FWIW that second VS first mortgage deal dose not sound right to me. It may be worth a call to a shister...er......lawyer just to make sure.

 

[QC]

Re: Foreclosure stuff

Be aware if the selling price does not cover all the expenses, LB is liable for the balance.

My understadning is only for the 2nd, not the 1st . . .