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My landlord is in a pickle and I want to see if I can benefit from the situation. She is underwater on her mortgage and I may be able to buy the property through owner financing. She has also been served foreclosure papers but it is in the earliest stages. She also owes property tax from 2008. Total back mortgage totals 9500.00 and taxes total 5250.00. She bought the property for 450,000.00 but owes 519,000.00 to the mortgage company suing her. The land value grew tenfold between 2005 and 2006 but now has corrected. The 2008 property appraised at 322,400.00. Supposedly her current loan is at 6.45%. She is trying a mod loan or refi, but supposedly is going to come current with the mortgage. The mortgage is only 1645.00 and even at the current appraisal that seems low. The property is in an area that will rise again in value and I feel it is near its bottom - it may decrease a little more but buy single percentage points and in ten years could easily be worth 1.5 . iIn 2006 it appraised at 629,000 and now at 322,400. Should I try to walk into a 1645.00 mortgage at no money down and do owner financing as long as she cleans up the bank situation. How will it work and should I instead attampt a short sale?????

Niicss · Posted: Thu Mar 05, 2009 4:07 am Post subject:

Hi hopper

If you think you will be able to afford $1645.00 every month, then you can definitely go ahead and buy the property. But you should also remember that she has back taxes. If you really intend to buy the property, you should ask her to clear off the back taxes before transferring it to you. I think, it would be better if the property goes into short sale. If you wish you can try buying the property at the short sale auction.

Thanks.

elnoralittle · Posted: Thu Mar 05, 2009 9:31 am Post subject:

I think the safest option for you is to buy the property under a short sale. The bank agrees to take less than what is owed and worth.
She already has a buyer for the property so the bank might find this option more favorable.
Thing is, if she sells the property to you, she is still going to owe the bank. Someone is going to have to come up with the back taxes and the late mortgage. If she doesn't have the money to give the bank, she can't really sell it to you with owner financing.

short sale is the best option.

gmakerley · Posted: Thu Mar 05, 2009 11:58 am Post subject:

owner financing only works if an owner can repay the existing debt on a property. this is clearly not the case here.

elnora, how did you determine that there's already a buyer for this property? i don't notice that in the original post. are you a neighbor or something? Very Happy

short sale seems the likeliest scenario for you, hopper.

Guest

she said her landlord is in a pickle...she wanted to buy the house...she is the buyer Smile

gmakerley · Posted: Fri Mar 06, 2009 11:42 am Post subject:

gotcha! i rereviewed the original post and discovered that, too. i guess i took my glasses off when reading it originally.

thanks.

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