- Property A - This was a woman who had moved out of her house to take care of her grandchildren after several tragic family incidents. There were 3 loans on the property totalling $65k. The property "as is" is probably worth slightly less than that but a "drive by" BPO (Brokers price option - an appraisal) by the second bank put the value of the house at $76k (The interior needs lots of updating to bring it up to that value). The second loan was a HELOC with a 5 year balloon. The second bank had not been willing to renew the balloon and consequently filed the first lis pendens. The owner stopped paying the first mortgage shortly thereafter but stilled continued to pay on the third. The first mortgagee has since filed a lis pendens. Ironically, the third was unaware the property was in foreclosure since the owner was current on her payments. This should have been the easiest short sale to do since the third must take over the first two mortgages or will lose everything. Yet, the the third has been adamant that they don't do short sales. I started working on this property back in mid-December and it is still unresolved. Update: Just spoke with the third and they think the property is worth $91 and won't negotiate. I feel badly for the woman who wanted to avoid foreclosure. An interesting side note about this property is that both the lawyers for the second bank and the third bank were trying to foreclose on the wrong property (she had conscientiously given them her new address and was rewarded with incompetence.)
- Property B - This was an unmarried couple that separated. The boyfriend lost his job and they just stopped paying both mortgages. There were two notes on this. The owner owed $40k on the second. I submitted a short sale package to the second mortgagee and called to confirm receipt the next day. The loan mitigator immediately accepted my offer of $2500 to payoff the $40k. I closed this property Tuesday. I bought the house "subject to" the first mortgage (in other words, I am continuing to pay on the first). My main concern is the high monthly mortgage payment I have to keep up until I can repair and sell the property may eat away the profit.
- Property C - This gentleman inherited a home from his father and borrowed $40k on a home that he claimed to live in (he used it as rental). The home was never worth more than $30k. The owner used the money to buy a nice SUV, big screen TV and didn't improve the home. There was only one note on this home. I offered the bank $10K and they want $27.5K. I declined to pursue this.
- Property D - An elderly women lived in this home for 15 years and got sick last fall. Somehow this woman had gotten the bank to loan her $66k first loan and a $6K HELOC on a home that was never worth more than $30K. She abandoned the home and moved in with a relative. The home was vandalized and heat was turned off (in Buffalo during the winter). I called the lawyer and he inadvertently told me the bank was going to walk away from the home. I submitted an offer to the bank for $1k and they countered at $7k and we settled at $5k. The property is worth at least $20k and maybe more. The interesting thing about this property is the two dozen liens that had been placed on it by other parties. The woman had a common name and it seems everyone wanted to put a lien on it. In the end, it didn't seem to matter to the Title company (the seller just signed an affidavit saying the other people were not her). We also closed on this property Tuesday and my plan is to wholesale it.
I think the main problem with Property A is that the woman had spent a lot of money fixing the exterior of the house and all the appraiser did was a "drive-by" BPO which inflated the real value. Maybe the bank at Property D did a better job appraising the house value, but there was nothing I did to convince them to sell at a low price, since they already had decided to abandon their position.
And why did so many of these banks lend so much money on houses that are clearly lower in value than what was owed? I use RealQuest to access public records and cannot see how they can be so mistaken in value. The NY Home Equity Theft Act will make it harder for me to continue to do foreclosures, since my lawyer thinks no one will issue Title Insurance now. But, 50% conversion on my efforts to date seems OK.