Buying a foreclosure / short sale / etc
Aug 8th 2009, 2:07 pm
#31
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Location: San Francisco Bay Area
Posts: 10,678
Re: Buying a foreclosure / short sale / etc
Thanks. The property is vacant already, and in very good shape 'visually' (inspection required to verify). Inspection is scheduled for next week. I won't be removing that contingency until the inspection is actually done.
My biggest concern is actually the Homeowner's Association. The reserves are not that great, and the property is old enough to be needing significant work in the upcoming years (roof, paint, etc). The mgmt co. told me the strategy is for 'special assessments', which the HOA have to approve by a 2/3rds majority. Given the current economy, not sure how easy it will be to get those approved. The good news is, being an older place, the 'population' of the development is pretty solid - only a small number of units changed hands in the last few years, so there aren't too many owners 'under water'. Lots of brand new developments have 100% of owners under water, or worse, have units still owned by the developer - who is bankrupt. I was president of the homeowners association back in my first condo in SF back in the '80s so I'm not a stranger to HOA issues.
The 'acceptance' documents presented to me show that both first and second lienholders are getting a share; the first holder is getting about 60% of their money back, and the second holder is getting about 10% of their money back. The paperwork suggests both acceptances are by debt collection agencies ..."this communication from a debt collector is an attempt to collect a debt...".
The property was 100% financed; total price back in 2006 was about $300k; first loan about 75% ($225k) and second was about 25% ($75k). So the 'first' guys are giving up about $7.5k to the 'second' guys.
My biggest concern is actually the Homeowner's Association. The reserves are not that great, and the property is old enough to be needing significant work in the upcoming years (roof, paint, etc). The mgmt co. told me the strategy is for 'special assessments', which the HOA have to approve by a 2/3rds majority. Given the current economy, not sure how easy it will be to get those approved. The good news is, being an older place, the 'population' of the development is pretty solid - only a small number of units changed hands in the last few years, so there aren't too many owners 'under water'. Lots of brand new developments have 100% of owners under water, or worse, have units still owned by the developer - who is bankrupt. I was president of the homeowners association back in my first condo in SF back in the '80s so I'm not a stranger to HOA issues.
The 'acceptance' documents presented to me show that both first and second lienholders are getting a share; the first holder is getting about 60% of their money back, and the second holder is getting about 10% of their money back. The paperwork suggests both acceptances are by debt collection agencies ..."this communication from a debt collector is an attempt to collect a debt...".
The property was 100% financed; total price back in 2006 was about $300k; first loan about 75% ($225k) and second was about 25% ($75k). So the 'first' guys are giving up about $7.5k to the 'second' guys.
Aug 8th 2009, 3:05 pm
#32
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Joined: Aug 2009
Location: Arizona
Posts: 4,130
Re: Buying a foreclosure / short sale / etc
I believe that if the first and second were both taken out at the same time as purchsae money mortgages which happened quite a bit back then, there should be no recourse but if the second was taken out after the first then there is recourse against the second defaulting mortgage.
Regards
Regards
Aug 8th 2009, 3:12 pm
#33
Lost in BE Cyberspace
Joined: Feb 2004
Posts: 14,578
Re: Buying a foreclosure / short sale / etc
Thanks. The property is vacant already, and in very good shape 'visually' (inspection required to verify). Inspection is scheduled for next week. I won't be removing that contingency until the inspection is actually done.
My biggest concern is actually the Homeowner's Association. The reserves are not that great, and the property is old enough to be needing significant work in the upcoming years (roof, paint, etc). The mgmt co. told me the strategy is for 'special assessments', which the HOA have to approve by a 2/3rds majority. Given the current economy, not sure how easy it will be to get those approved. The good news is, being an older place, the 'population' of the development is pretty solid - only a small number of units changed hands in the last few years, so there aren't too many owners 'under water'. Lots of brand new developments have 100% of owners under water, or worse, have units still owned by the developer - who is bankrupt. I was president of the homeowners association back in my first condo in SF back in the '80s so I'm not a stranger to HOA issues.
The 'acceptance' documents presented to me show that both first and second lienholders are getting a share; the first holder is getting about 60% of their money back, and the second holder is getting about 10% of their money back. The paperwork suggests both acceptances are by debt collection agencies ..."this communication from a debt collector is an attempt to collect a debt...".
The property was 100% financed; total price back in 2006 was about $300k; first loan about 75% ($225k) and second was about 25% ($75k). So the 'first' guys are giving up about $7.5k to the 'second' guys.
My biggest concern is actually the Homeowner's Association. The reserves are not that great, and the property is old enough to be needing significant work in the upcoming years (roof, paint, etc). The mgmt co. told me the strategy is for 'special assessments', which the HOA have to approve by a 2/3rds majority. Given the current economy, not sure how easy it will be to get those approved. The good news is, being an older place, the 'population' of the development is pretty solid - only a small number of units changed hands in the last few years, so there aren't too many owners 'under water'. Lots of brand new developments have 100% of owners under water, or worse, have units still owned by the developer - who is bankrupt. I was president of the homeowners association back in my first condo in SF back in the '80s so I'm not a stranger to HOA issues.
The 'acceptance' documents presented to me show that both first and second lienholders are getting a share; the first holder is getting about 60% of their money back, and the second holder is getting about 10% of their money back. The paperwork suggests both acceptances are by debt collection agencies ..."this communication from a debt collector is an attempt to collect a debt...".
The property was 100% financed; total price back in 2006 was about $300k; first loan about 75% ($225k) and second was about 25% ($75k). So the 'first' guys are giving up about $7.5k to the 'second' guys.
Aug 9th 2009, 7:12 am
#34
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Joined: Aug 2009
Location: Arizona
Posts: 4,130
Re: Buying a foreclosure / short sale / etc
Did you say that this was Steerpike's old hoa? I think I recognize most of them but where is Steerpike in that photo op?
Aug 9th 2009, 1:41 pm
#36
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Joined: Aug 2009
Location: Arizona
Posts: 4,130
Re: Buying a foreclosure / short sale / etc
I thought for a minute it was the upper management initiation ceremony at work.
Oct 7th 2009, 1:09 pm
#37
Lost in BE Cyberspace
Thread Starter
Joined: Nov 2007
Location: Bay Area, CA
Posts: 13,265
Re: Buying a foreclosure / short sale / etc
Thanks. The property is vacant already, and in very good shape 'visually' (inspection required to verify). Inspection is scheduled for next week. I won't be removing that contingency until the inspection is actually done.
...
The 'acceptance' documents presented to me show that both first and second lienholders are getting a share; the first holder is getting about 60% of their money back, and the second holder is getting about 10% of their money back. The paperwork suggests both acceptances are by debt collection agencies ..."this communication from a debt collector is an attempt to collect a debt...".
The property was 100% financed; total price back in 2006 was about $300k; first loan about 75% ($225k) and second was about 25% ($75k). So the 'first' guys are giving up about $7.5k to the 'second' guys.
...
The 'acceptance' documents presented to me show that both first and second lienholders are getting a share; the first holder is getting about 60% of their money back, and the second holder is getting about 10% of their money back. The paperwork suggests both acceptances are by debt collection agencies ..."this communication from a debt collector is an attempt to collect a debt...".
The property was 100% financed; total price back in 2006 was about $300k; first loan about 75% ($225k) and second was about 25% ($75k). So the 'first' guys are giving up about $7.5k to the 'second' guys.
I'm now going to start the financing process, so I can pay off the line of credit I used to buy the place; but I'm in no hurry - the interest rate on my LOC is only 2.74% (it's based on something like 'prime minus 0.5%' or similar - pretty amazing.
Oct 7th 2009, 4:31 pm
#38
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Joined: Jun 2005
Location: Oz -> UK -> San Diego
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Re: Buying a foreclosure / short sale / etc
Excellent news!!
Oct 8th 2009, 2:41 pm
#39
member of little note
Joined: Apr 2009
Posts: 526
Re: Buying a foreclosure / short sale / etc
Update - the whole deal went through about a month ago without any hitch - it was a remarkably simple, painless process. The banks accepted the deals, the closing happened, I got the keys. After all the stories I'd read about how bad the process could be, I was expecting a nightmare. So I ended up buying a beautiful 3 br/2 ba condo in a nice area of Scottsdale for about $150k - a property that sold for $300k three years ago. Now I get to watch the market and see if I made a huge mistake or not !
I'm now going to start the financing process, so I can pay off the line of credit I used to buy the place; but I'm in no hurry - the interest rate on my LOC is only 2.74% (it's based on something like 'prime minus 0.5%' or similar - pretty amazing.
I'm now going to start the financing process, so I can pay off the line of credit I used to buy the place; but I'm in no hurry - the interest rate on my LOC is only 2.74% (it's based on something like 'prime minus 0.5%' or similar - pretty amazing.
Oct 9th 2009, 2:23 am
#40
Lost in BE Cyberspace
Joined: Feb 2004
Posts: 14,578
Re: Buying a foreclosure / short sale / etc
Update - the whole deal went through about a month ago without any hitch - it was a remarkably simple, painless process. The banks accepted the deals, the closing happened, I got the keys. After all the stories I'd read about how bad the process could be, I was expecting a nightmare. So I ended up buying a beautiful 3 br/2 ba condo in a nice area of Scottsdale for about $150k - a property that sold for $300k three years ago. Now I get to watch the market and see if I made a huge mistake or not !
I'm now going to start the financing process, so I can pay off the line of credit I used to buy the place; but I'm in no hurry - the interest rate on my LOC is only 2.74% (it's based on something like 'prime minus 0.5%' or similar - pretty amazing.
I'm now going to start the financing process, so I can pay off the line of credit I used to buy the place; but I'm in no hurry - the interest rate on my LOC is only 2.74% (it's based on something like 'prime minus 0.5%' or similar - pretty amazing.
Jun 10th 2010, 8:49 pm
#41
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Thread Starter
Joined: Nov 2007
Location: Bay Area, CA
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Re: Buying a foreclosure / short sale / etc
Another update - I'm in the final stages of refinancing the place I bought last year. The appraisal came in at $135k - 15k lower than the price I paid ($150k). So the market is still pretty ugly!
I'm not really concerned, as I love the place, and the drop is not much. I don't see myself leaving any time soon, and there seems to be a decent rental market in my area. In fact, I'm looking to buy something bigger/better, and with prices continuing to fall, I may be able to do it. Still - the realities of this real-estate market are not pleasant!
I'm not really concerned, as I love the place, and the drop is not much. I don't see myself leaving any time soon, and there seems to be a decent rental market in my area. In fact, I'm looking to buy something bigger/better, and with prices continuing to fall, I may be able to do it. Still - the realities of this real-estate market are not pleasant!
Jun 4th 2011, 8:33 am
#42
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Re: Buying a foreclosure / short sale / etc
Just to keep anyone who is interested up to date ...
The refinance process did not complete until March of this year 2011; started in April 2010 !!!! It was the most frustrating process ever, but since I was in no hurry I just let it go on, partly enjoying the 'train wreck' of their process. All I can say is, if it took me a year, with my 800+ credit score and substantial income, I can see why the housing market is not getting off the starting line! As an example, 9 months into the process, they would ask for written explanations as to why I had an (eg) $2,000 deposit into my bank account (was an expense reimbursement for a business trip) ... crazy stuff.
I paid about 150k in 2009; last appraisal was about $125k, and there are 'short sales' in the complex for 100k. This was definitely not a good financial investment, in retrospect! Still happy to be here, though ...
The refinance process did not complete until March of this year 2011; started in April 2010 !!!! It was the most frustrating process ever, but since I was in no hurry I just let it go on, partly enjoying the 'train wreck' of their process. All I can say is, if it took me a year, with my 800+ credit score and substantial income, I can see why the housing market is not getting off the starting line! As an example, 9 months into the process, they would ask for written explanations as to why I had an (eg) $2,000 deposit into my bank account (was an expense reimbursement for a business trip) ... crazy stuff.
I paid about 150k in 2009; last appraisal was about $125k, and there are 'short sales' in the complex for 100k. This was definitely not a good financial investment, in retrospect! Still happy to be here, though ...
Jun 4th 2011, 12:51 pm
#43
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Joined: Aug 2009
Location: Arizona
Posts: 4,130
Re: Buying a foreclosure / short sale / etc
This is compounded by the difficulty in obtaining condominium financing.
http://www.insidebiz.com/news/condo-...sy-proposition
http://www.insidebiz.com/news/condo-...sy-proposition
Jun 4th 2011, 2:27 pm
#44
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Location: San Francisco Bay Area
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Re: Buying a foreclosure / short sale / etc
This is compounded by the difficulty in obtaining condominium financing.
http://www.insidebiz.com/news/condo-...sy-proposition
http://www.insidebiz.com/news/condo-...sy-proposition
In the current housing recession, many have problems selling their unit and decide to rent out their unit instead. In my current condo, the CC&R was recently amended so that only a certain number of units could be rented to keep the number of rentals below the percentage where banks would not offer owner occupied loans. However that was voted down because many in the complex are contemplating possibly renting out their unit in the future because of the poor housing market. However if the number of rental units exceed that percentage, it may become very difficult to sell the units even when the housing market improves.
Jun 4th 2011, 2:29 pm
#45
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Location: Arizona
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Re: Buying a foreclosure / short sale / etc
Exactly.
