I’ve been in contact with the hard money lender for my Dallas property. I told him I have this buyer from New York City but he is taking a while to close. We have escrow open but I still don’t have a closing date from him! The auction is coming up on November 7th so I have only a few days left.
So I asked the lender if I can deed the property to him instead of going through foreclosure. After a little bit of email conversation and checking my title, the lender agreed!
The lender assured me that by doing deed in lieu of foreclosure there is NOT going to be any foreclosure on my credit. And they haven’t yet reported to the credit bureaus about my late payments either. Wow, that’s great! My wife will be happy!
Here is the entire conversation with the lender. Enjoy:
August 14th, 2006
HARD MONEY LENDER:
Mr. Serin,
Without a response describing the method of correcting your last payment NSF this will be turned over to legal tomorrow.
When I get this email, I contact the lender’s assistant and tell her that I got over-leveraged and need a little bit more time. After some time passes, I am asked for the payment again. Then I decide to be upfront about my situation and start talking directly with the lender by email:
September 14th, 2006
CASEY:
I’m very sorry about not being able to make payments on the Anglridge Dallas property… I’m making every effort I can to sell this thing quickly. I have it listed plus I’m working with an investor (wholesaler) who is trying to find me a buyer. His name is [wholesaler] and may be calling you or the attorneys. I also have [NYC investor] who may call you.
Again, sorry about all this and thank you for taking a chance on me. I made some bad moves and now in trouble. I’m facing foreclosure on 5 houses in 4 states. If you care to read the story here it is: www.IamFacingForeclosure.com
HARD MONEY LENDER:
Read it already. Sorry for your troubles and I will consider a deed-in-lieu if there are no unpaid bills or liens however I will not pay you for the deed.
CASEY:
thank you for your deed-in-lieu offer. I will try to sell it a little bit longer and if nothing else works I will turn it over. If that’s the route I will need to go, what do I need to do? Tell me my next step so that I’m ready to act. Thanks.
HARD MONEY LENDER:
I hope you sell it and recoup some of your equity however if that doesn’t work then contact me. I’ll get the papers drawn up.
Good Luck.
At this time I am dealing with a wholesaler who tied up my property and was trying to sell (assign) the contract to another investors. He tries hard but is that able come through in time. So then I start dealing with the NYC investor. We have a few set-backs and have to overcome some obstacles but then I get a green light and the buyer opens escrow. The contract calls for a 10 days close but we’re now way past that. I still don’t have a close date and keep getting the “we’re working on it” response from the buyer. Then I get The Letter.
October 25th, 2006
CASEY:
I just opened the Notice of Trustee today. Looks like the Angleridge Dallas property is going to be up for sale on November 7th.
I’m currently in escrow with [NYC investor], the cash buyer out of New York City. I’m not sure when he is going to close but everything is still going forward. He said it should happen pretty soon. I will be forwarding him a copy of the NOT so that he can hurry up.
Is there any chance we can delay the Trustee Sale?
Also, if this buyer backs out, I have another one who wants to buy it for the amount of the payoff. However, that is going to be a whole new escrow and I will need some time for that.
Let me know what you’re willing to do.
Also what about just doing a deed-in-lieu like we talked about? Would you go for that instead of the trustee sale?
Let me know… Thanks.
HARD MONEY LENDER:
Casey,
The sale can not be postponed w/o a very good reason, i.e. payoff. If you can have the closing company and [NYC investor] contact [Lender’s Foreclosure Attorney] then he can evaluate the potential contract/sale.
CASEY:
Would you be willing to do a deed-in-lieu?
HARD MONEY LENDER:
Why?
CASEY:
I want to find a way to prevent my wife’s name from being tarnished by a foreclosure… We’re both on this loan. How can I avoid it? Will you accept the deed-in-lieu of foreclosure with no foreclosure mark on her record?
HARD MONEY LENDER:
How many liens are on the property after [our lien]? There is no buyer is there?
CASEY:
Just [your lien].. Nobody else.
HARD MONEY LENDER:
We’ll check title tomorrow.
CASEY:
Thank you very much! If you can help me avoid foreclosure and do not report any lates on my wife’s credit that would be the best!
And if you want, I can send you some traffic to your site so you can get more business.
My blog is receiving some national exposure – I was in the USA Today and other main stream media.
Anybody who helps me out of my mess will receive a favorable mention and free traffic. Its win-win.
If you prefer, I can of course, not say anything and keep [Lender name] completely private.
Whatever I can do to help…
A couple of days later… October 27th, 2006
HARD MONEY LENDER:
Send us the deed-in-lieu.
CASEY:
1) I’ve never done a deed-in-lieu… How do I put one together?
2) Can we agree that nothing will be reported on my or my wife’s credit (lates payments, foreclosure, etc). That’s all I’m worried about.
Thanks
HARD MONEY LENDER:
1) Attached. Change the notary notation to wherever you are, you are the Grantor, fill it in exactly as you took title. Get at least 1 witness to sign it preferably your wife & 1 other.
2) Agreed
CASEY:
Thanks… I’ll get right on it.
Have you already reported the late payments to the credit report companies?
HARD MONEY LENDER:
No.
—
Isn’t that great?
Being able to talk to your lender by email like that. I really like dealing with small hard money (or private money) lenders! So much easier then big conventional lenders – with layers of management and all the red tape. Of course the hard money lender only loans up to 65-70% Loan-to-Value. That’s why I didn’t use more hard money on my deals – I didn’t have anything to put down and I wasn’t getting my deals cheap enough to get into hard money with no money down.
So the question is…
To Deed or Not to Deed?
I really want my NYC buyer to close because I will be getting a little bit of money out of it. I need any cash I can get to survive until I get my RE biz back up. But the NYC buyer is still not giving me a closing date. The purchase contract has expired. So I am not tied up anymore.
I do have this other buyer who wanted to pick it up from me for the pay-off amount. So I would not be getting anything out of the deal with him either. Deeding the property to the lender or selling to this other buyer will be the same result financially for me. This other buyer may also tie me up and not close. So I’m not sure if I should even bother.
Need to decide quick! My wife’s credit is at stake!
[UPDATE] As I was writing this article (yes on a Sunday!) my wife came up to me to see what i was doing on the computer. I told her about the deed-in-lieu approval and explained to her what that means about saving her credit. I told her I’m not sure if I want to proceed yet, still hoping to get a little bit of cash from NYC investor.
She says:
Are you kidding me?? On one hand you have the ability to saving my credit. On the other hand you are hoping for $3,000 from some flaky buyer who probably will not close. Stop gambling and SAVE MY CREDIT!!
She is right.
I’m leaving tomorrow night to Phoenix for Robert Kiyosaki meeting. So I better go get that deed notarized first thing in the morning morning.
