can i buy my neighbors house for 200k even though they owe 350k? who will have to come up with the remaining?

Question

Background: the neighbor is in debt to their eyeballs... Home equity line of credit, cars, car lease etc. I was just wondering what would happen if I offered to buy their house for less than appraisal value? IS this legit? can this be done to stop the bank from taking the house?

Answer 1

You can buy it for a dollar. UNless they get enough for it to release the mortgage on the house, you'll never get a clear title to the house; the mortgage will be there untill it is released. The only thing that stops a foreclosure is an offer to pay off the amount the mortgage is currently open for.

Answer 2

That type of sale is called- Short Sale. If the seller and the buyer agree to it then the bank has to approve it. I have never heard of a bank that would take $150K less then what they are owed however it is always worth trying. You might want to get at least one realtor involved who is willing to take just simple 3% comission for both ends of the deal. It is a lot!!!! of work and a lenghty process. Banks will take less then what they are owed in many instances, especially with the market going down right now. You might not get it for $150K less but you might get a good deal.

Answer 3

If it's in 2 mortgages then you have a better chance. The 2nd mtg you contact them & tell them going into foreclosure can I offer you a few thou instead of the whole amount. They have second title & will get nothing in a foreclosure. So you're few thous is something & most of the time they'll budge.

The first mtg company may offer a short pay but they generally work out an arrangement to get the rest of it. They may negotiate for part of it. I've seen they let people assume it if they come up with a certain reinstatement amount. Try charging part of that to the current home owner for helping them out.

Good luck,
Kaye

Answer 4

Only with the bank's agreement, and chances of you getting them to agree to write off $150K are zero to less than zero. What will occur here is the bank will foreclose if your neighbors cannot make their payments and then the lender will sell the property to the highest offer they can obtain. They have the right to refuse any offer, and generally don't come down much below market value.

Answer 5

They would have to come up the remaining balance to keep the house out of foreclosure. Someone needs to pay the bank what they are owed in order to stop a foreclosure. They might want to consider bankruptcy if they have no chance in paying off their bills.

Answer 6

if they will talk to you, try to find out some more details, their house will probably go into foreclosure, you're in a good position, ahead of other investors because you know them & their situation.

If you can find out if they've been late recently on mortg. payments, they're probably getting close to have an official Notice of Default recored against them on their home.

Once that is filed though, it is public knowledge & investors will be coming out of the woodwork to go & knock on their door.

Tell them you can help them save (some) of their credit by them not going into foreclosure. Tell them you would be interested in buying it. Prior to foreclosure, the bank should agree to accept less than is owed.
Whether or not they would take a $150K cut is debateable. the bank is going to want to see what other comparable homes in the neighborhood are selling for.

Talk to a real estate agent about this. Talk to the owners & get as much info as you can.

Answer 7

I agree that the bank is not likely to eat 150k and sell to you. They will be better off letting it rot and using it as a tax deduction.

In addition to the short sale you will have to take any liens on the property into the equation. People trying to live beyond their means to that extent also tend to have other outstanding debts and tax payments are sometimes a problem as well.

Answer 8

is that house worth 600,000+ ?