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Taking Vitals Before Proceeding With Foreclosure

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Taking Vitals Before Proceeding With Foreclosure

If you come to any event that I speak at, you’ll likely hear me say, “Every home has a heartbeat!” This is true. I also have a business to run and the only way I make the profit to feed myself and all the other people that depend on what I do for a living is to be business oriented. So how do I, and by extension, you, determine when to take a house away from a person or not?

There are some rules, some feelings and signs that can indicate one way or the other, but before I get into each of these, let me paint a picture for you.

In the Wolverine State, aka Michigan, there lives a man who is a bit behind on his house payment. Actually, he is very behind on his payment. In fact, his property taxes are 3 years delinquent in the magnitude of some $3000!

We have attempted to reach him to create some kind of plan—really any plan at all—to bring him current over 200 times. Plus statements, and demand letters and more all to no avail.

We have over $3500 in attorney’s fees and the house is worth about $80k, though the payoff on the note is some $211k.To top it off, in Michigan there is a 6 month redemption period and the only way to shorten that is to prove the property vacant. So foreclosure is something of a process, but it was next on the list, and something we felt would need to be done in order to recover our investment.

We finally got his attention with foreclosure proceedings.

Here’s the deal, though. We finally got to talk with this man and discover his story. Before we did this, we had a local agent drop by and take a look at this property. Know what he found? This home was in a decent part of the city and it looked well kempt and it looked as if the owner had taken real pride in the property. 

These are generally good signs that the owner might like to work with us, so why was he being obstinate?

When the foreclosure letter was served, we finally got some answers. He was a disabled veteran, not used to making so little. Indeed, he felt rather embarrassed, but we were able to gather some information from him. 

In the end, we decided on some extended leeway. You see, I don’t stay in this business simply to make money. Any fool can make money, but I really want to help the borrowers out.

This man had been in the military and served his country, and by extension, me. He had already paid a terrible price for that service but I felt he needed a leg up so I gave him 10 days to complete a hardship package. We are helping him contact state agencies to see what type of help he can get for his mortgage.

If we are successful, he can get a homestead exemption for his property taxes and go on a payment plan for the delinquent taxes. If we are less successful, and the county is not willing to give him a payment plan, we will pay the property taxes on his behalf. This will allow him to keep the home and pay us the full amount he owes, but in a way that is easier for him to achieve.

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Saprina is a nationally recognized expert in mortgage and trust deed investing. She has over 18 years of collections and mortgage experience, and has worked debt portfolios for both national financial institutions and individual note investors. She has extensive experience with loan modification, foreclosure, short sales, cash for keys, and mortgage deficiencies. Saprina is a sought-after speaker and readily shares her knowledge and experience.