Foreclosure University Blog

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Hey Everyone,

Jarad here with some exciting news…

A good friend of mine, Cameron Dunlap, and I just launched a new product.  The reason I am so excited is because the product is absolutely incredible.  Especially for anyone who is looking to cash their very first paycheck or more of them…

Because of the market meltdown, many people have been hesitant to buy and sell real estate right now because they are afraid they may not be able to sell the property or they believe it requires their own personal credit or money to land a paycheck.

I’m here to tell you that this is the WORST time to quit or stop investing.  Deals are all over if you just know where to look.  And there are ways to invest where you don’t risk your credit or income, plus with this new product, it will do most of the work for you.

You can check it out if you’d like… http://www.foreclosureshortsales.com/iflip/

Also if there is anything you are struggling with out there I want to know about it .   Or if there is something that would help you or you want to learn more about, let me know so I can help make your investing experience a better one.

Hey,

Jarad here and I just wanted to let everyone know that we are officially funding deals now.   We’ve had a ton of requests for it, so we decided it was time to make it available for anyone who wants to flip houses.

Now this type of funding is also referred to as “transactional funding”.  It is not a loan so credit and income verifications are irrelevant.  It is a short term strategy so it’s specifically designed to help investors with quick flips.  It is not a long term loan like hard money.  In fact most of these transactions are 1 week or less.

If you want to learn more about it you can visit http://www.foreclosureuniversity.com/transactional_funding_request_form.php

You will see answers to the most common questions on that page.  We look forward to funding some of your deals.

Question: I had a home in Virginia that was foreclosed upon. The second lien holder is trying to collect from me. Can they do this and what options if any do I have?

Answer: -  Yes, they can try to collect what they lost.  They could file a deficiency judgment against you for the amount they lost which would require you to pay the amount back in full.  Most people file bankruptcy.  You could work out some sort of re-payment plan over several years or ask them to forgive some of the debt and settle for a smaller amount.

Question: can a bank which i borrowed money from as an equity line on a property i owned out-right, foreclose on the property itself if the equity line payments are not being made?

Answer: – Absolutely… I’m sure if you review your paperwork it will tell you that they have the right to foreclose if payments are not made.

Question: I’m trying to purchase a short sale with three liens. A first at 600,000, a second at 80,000 and a third HELOC at 117. The bank holding the first two loans accepted the offer, which is coincidentally exactly what the house appraised for. The first and second have been zero’d out and forgiven. The bank holding the third in line HELOC, which I’m not giving the name of (although I should because they’re very inconsiderate) are holding the short sale hostage even though they are getting ten percent of the HELOC balance. We have offered 10,000,in addition to what the first bank is passing through (5,000). I thought they would rather finish a short sale than go into foreclosure. Nothing makes sense. Recently we offered them 15,000 on top of what the first bank is passing thru, bringing it 5,000 beyond what the house is appraising for, which means it’s not in the loan it’s out of my pocket. The retailer informed me the bank negotiator said if we give the bank 22,000 they’ll sign off today on the loan, otherwise, we’ll just have to wait. This is almost extortion, because it brings the price well over the appraisal. Is this all legal?

Answer: – Unfortunately yes… and it makes no sense at all because if it goes to foreclosure the 3rd gets nothing because no one will bid more than what it appraises for.   And if they don’t agree to satisfy or release the lien, then it will continue to go to foreclosure.  So you have to be persistent and prove to them again and again that what they are asking for is unrealistic.

Sometimes lenders will have 3rd party collection agencies handle the negotiations once it passes a certain time frame.  This is typically when you’ll find a great deal of resistance and difficulty in negotiating the price you want.  These collection agencies tend to be very unrealistic in their requests.  We had a situation where they were being so unrealistic that after 6 months of negotiation and getting no where, we complained to the lender and told them how unprofessional, rude and dishonest this collection agency was.  So they pulled the file from them and we were able to get the short sale approved and completed in less than 30 days.

So don’t give up, be persistent, stick to your offer, make them see that they are being ridiculous in what they are asking.

Question: Can a 3rd party, acting on behalf of a 2nd mortgagee prevent the closing of an approved Short Sale by refusing to accept the amount offered them by the 1st mortgagee?

Answer: – Yes they can… Many times mortgage companies will have 3rd party collection agencies deal with negotiating payoffs.  If they don’t like the offer they don’t have to accept it.  Sometimes they can very difficult to work with.  They only way is to either give them what they want by handling it outside of closing or negotiate with them more until they decide to accept.

Question: What is a Deed in Lieu? Which is better, short sale or deed in lieu? I am in So. California.
MS

Answer: – We explain what a Deed in Lieu of Foreclosure is in our free reports section. With a deed in lieu foreclosure you are giving the home back to the bank. By giving or deeding it back to the bank, the deed is considered full payment of the mortgage loan, so there cannot be a deficiency judgment. However, there are certain restrictions like all junior lien holders must be satisfied and there must be clear title. Although you’ll be avoiding a deficiency judgment, the bank will 1099 you for the deficient amount. This deficient amount is calculated by taking the difference between the fair market value (FMV) and the outstanding debt. As far as credit issues, a deed in lieu of foreclosure shows up as “Acquisition or Abandonment of Secured Property” and is very similar to an actual foreclosure.

A short sale on the other hand has fewer restrictions but is very similar in avoiding a deficiency judgment. You can ask the bank to satisfy the loan so it’s paid in full. You will be 1099 for the deficient amount. And for your credit, a short sale shows up as a “settled debt” which is very similar, however most credit experts believe a short sale is better on your credit report than a foreclosure or deed in lieu of foreclosure. I would have to agree…but it’s not by much. Any way you go, it’s going to be bad on your credit.

Question: I made an offer to short sale a home. Now after all the months of waiting, bank couter offered my offer.  Can I counter offer or do i have to just accept the price the bank wants for the short sale home?

Answer: -Absolutely…a lot of being successful in this business is your ability to negotiate.  Your ability to negotiate and negotiate well literally will make you thousands more or cost you thousands.  If they countered with a higher price, this means they believe the house is worth more than what you proposed in your offer.  You will need to explain to the lender why you believe it’s not worth that and you’ll have to back it up with comps, repair costs, market conditions, pictures, etc.  You may need to even ask for another BPO (Brokers Price Opinion).  Now…if it’s only a few thousand dollars and your end buyer is all lined up and as it is you stand to make a large profit from it, you might want to consider just doing the deal and moving on to the next one.  You don’t want to wait another 2 months before they accept your offer because you might lose your buyer.

Question: If a non-primary residence in NY goes into foreclosure, what determines whether I receive a 1099-C or a deficiency judgment for the bank’s loss?

Answer: -A lot of times it just depends on the lender and the amount that’s deficient.