Stop Foreclosure in Kansas CityI am so upside down in my investment property. To set the scene, about one or two years ago 1,000s of investors found some reallygreat deals on properties that they could buy, renovate, and resell. (Some boughtto rent) They put 5% to 10% down or through hard money rehab loans andrefinance, may have bought with no money down. Based on the economy of theday, the buy was a great deal. Then the bubble started breaking at different times over the past 2 years. Somecould not get the home sold, so took a back up plan of selling lease to own andhoping the tenant buyer would cash them out quickly, but they took a while to do itand today, the house does not appraise high enough, so they are faced with takinga loss, or in some cases cash out of pocket because they now owe more than whatthe house will appraise and sell.Others had the rentals cash flowing, but the taxes increased over the years, theinsurance increased over the years and the interest rates on the loans increased. Their original plan was to refinance into lower rate loans after one or two years, butagain with the glut of foreclosures on the market, the houses will not appraise highenough to allow them to refinance, if they can even find a lender that will refinanceinvestment property.All in all, they really want to sell this non-owner occupied property, but it appraisesfor less than what they owe and they are stuck. Many times the rent coming is justcovers or in some cases does not cover the mortgage. They call me as the Directorof thelocal REIA Groupand ask me for advice.First let me say I am not an attorney, and I would recommend getting competentadvicee from the right people. But I am going to share with you what I haveobserved. Secondly, this is for non-owner occupied houses, if you live in yourhouse, many of the new foreclosure laws will force your lender to work with you onmany of the options I am going to share, but if it is non-owner occupied, you arepretty much at the mercy of the lender.I would start with a phone call to your lender or lenders and outline the situationwith them. You owe more than the house will appraise, the rent is barley or notcovering the expenses, and you have to make some tough choices with fundscoming in and you may let the house go into foreclosure. Also be armed with dataon the area, how many bank owned houses are currently for sale in the area, howmany boarded up houses are in the subdivision, how long it is taking bank ownedhouses to sell, and the prices they bring.Ask them for your options that they can give you.

We called on some of our properties and they were willing to modify the loan. Yourlender may or may not do this. They might lower your interest rate. They mightreduce the amount owed. They might re-amortize over a longer period. They mightput back payments on the end of the loan. They might do any combination of theabove. And they might not.Remind them of the new law. Remind them that your tenants just signed a 1 yearlease and if they foreclose, they are going to have to manage your tenants for thatyear plus 3 months. Banks are not property managers, so they might be morewilling to work with you.If that works great, if not ask them about a deed in lieu. Would they be willing totake the house back and declare the loan paid in full. Some will, but others maywant you to sign a note for the deficiency and get on a payment plan. May be ok if the deficiency is only a small amount, but most people are seeing deficiencies of around $20,000, and most people do not want to agree to paying off that $20,000 indebt. But it might be an option for you. You sign it back over to the bank and theywrite off the loan either with or without the deficiency judgment. The last option, would be to see if they will consider a short sale. Never mind if youare current or not. Talk to them and let them know you will be late soon and manyof the banks will consider your short sale option. If you can sell close to the amountowned, but not quite, they will be more willing. But if you owe say $60,000 and youcan only get offers in the $15,000 to $20,000 range, they might not want to play,and again they might bring up the deficiency again.If you want to try the short sale approach, contact your local REIA with yoursituation, and ask them for one or two people that work short sales in the group andsee if they might take on your project. You could even work one yourself if you canget a member of the group to make an offer. Also note that often times the offermade on the short sale, will set the price of the sale at the courthouse. So if youcan’t get the deal worked, at least you have a rough idea of what the opening bidmight be, and your person making the offer might be able to buy it at thecourthouse. That’s the way it works many times, so do with that what you will.If you have tried what you can as the person or company that owes the loan andyou just can’t get anything to work, all is not lost, there are still options. Foranother resort, you might want to get with a loan modification specialist, they mightbe able to renegotiate your loan for a fee – usually about $1500 is what I have seen. They often times have an attorney review all your paperwork and find somemistakes that could be used to sue the lender, and the lender might back down andrenegotiate as they loan could be set aside completely if there are mistakes, andalmost every loan made in the past few years is going to have one or two mistakesin the paperwork somewhere.

Another option would be to find the note buyers in your REIA group. In this casethey collect all the same information on what the house would sell for should thebank foreclose, plus all the cost of dealing with your tenant or dealing with thevacant property should it be vacant. But instead of going to the loss mitigator thatmodifies the loan or approves a short sale, they go to a person that can negotiatethe sale of your mortgage itself.It seems that the sale of notes and mortgages do not have the rules of loanmodification and short sales. The sale of notes at a discount are a lot easier and thelender may be very willing to let your note buyer buy your note at a substantialdiscount. The bank gets the potential bad debt off their books, they don’t have aloan modification, a foreclosure, a short sale, or a delinquency on their books. Thenthe note buyer becomes your bank, they then may be able to: (1) work with you toreinstate the loan at better terms that work for the rent you have coming in, (2) sellthe property at a current value and get you out of the house, (3) partner with you inthe deal in some way. Again go to the REIA group and see who buys delinquentmortgages.I hope this give you some ideas. If you have a Kansas City area investmentproperty that you are upside down in, please call our office at 816-523-4447. OremailkcmoHomeBuyer@gmail.comwith the details on the house: (1) address, (2)beds, baths, etc, (3) rent and lease terms, (4) mortgage owed, payments, late fees,(5) condition of property and cost of needed repairs. We may be able to work ashort sale or buy the note. We can’t help everyone as we don’t buy in all areas, butif we can’t we may know someone who can.As a note of the deficiency judgment, we had a debt collection company visit andspeak at our RIEA group and they said the best way to stop a deficiency judgment inits tracks would be to declare bankruptcy. Then it goes away, but there are otherissues involved with bankruptcy, so talk to an attorney to explore your options.Kim Tucker along with her partners Don Tucker and Joe Reece have been buying andselling homes in the Kansas City Market since 1999. They are cash buyer’s and canclose quickly. They are buying to make a profit and will remarket most propertiesfor sale shortly after the purchase to their pool of cash buyers looking for goodrental property opportunities in the Kansa s City market. They can be reached at816-523-4447 or atwww.kcmoHomeBuyer.com. They also have industry partnersthat they can refer properties to if they do not fit their model.Stopping foreclosure and buying notes and buying through short sales in KansasCity Missouri, Raytown Missouri, Grandview Missouri, Independence Missouri, PrairieVillage Kansas, Mission Kansas, Roeland Park Kansas, Overland Park Kansas. Call usto stop your foreclosure!