Stopping Foreclosures With A Foreclosure
Presale
By John Michael
This strategy will help your customer to pay off their loan
and avoid damage to their credit rating.You customer may qualify if:
a.. Owner-occupant (rental or vacancy considered by lender on a case by case
basis)
b.. At least two months delinquent at time of closing
c.. Arms Length Transaction
This is an expression used to describe a transaction between persons in which
each acts in their own self-interest. Unrelated persons usually deal with each
other at arm's length, although this might not be the case if, for example, one
is under the influence or control of the other.
a.. Doesn't have resources to bring current
b.. Foreclosure is inevitable
c.. The "as is" appraised value is at least 70% of the amount owed and the sales
price is 95% of the appraised value
d.. The loan is at least 2 months delinquent prior to the pre- foreclosure sale
closing date
e.. Your customer is able to sell their home within 3 to 5 months (depending on
what the lender agrees to).
A presale is regular cash out sale - Not much creative but can provide a delay
that you will need as an investor to conclude the transaction.
If PMI (Private Mortgage Insurance) is involved a company may subsidize the sale
even if the property has negative equity. The PMI Company will pay off part of
the loan as long as the amount to be paid stays within the policy limits.
As part of this agreement, the property owner agrees to sell the property to pay
off the rest of the loan. Normally the investor will have to make this
attractive to the PMI Company by placing a large deposit towards the purchase of
the property.
If the lender sees that the borrower has equity and is making serious efforts to
market, the property the lender will generally delay foreclosure for a
reasonable time to allow the property to sell.
The lender will probably require the borrower to make full or partial payments
during the marketing period to keep the overdue balance from growing.
You as an investor can front all the cost as part of your purchase agreement.
Email: John@jmichaelrei.com
http://www.jmichaelrei.com/
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