No Free House

Can’t afford, or won’t pay

On January we acquired we acquired a non-performing note secured by a house in a desirable area in South Florida.

The file looked like it was a very likely a foreclosure because the borrower is six years behind on his payments, but I never set an exit strategy in stone until we talk with the borrower. Sometimes we get a pleasant surprise that the issue is a misunderstanding with a previous servicer or lender.

The property taxes were several years delinquent and the property was about to be subject to a tax sale.

As a previous lender had filed for bankruptcy we thought that the loan might have had a lack of oversight or due process and that we could help the borrower.

It doesn’t look like the case on hand. It looks like they are looking for a free house

We made positive contact within the first month and they are dragging their feet. We always talk reach out to borrowers to let them know of ways they can keep their house and even discuss case studies. I understand that everyone can have a hardship and fall way behind on the commitments, but good faith goes a long way.

From his interactions, we understand that he doesn’t want to work towards paying to stay on the property or they simply cannot afford it. Is he looking for a free house?

What can be done in this situation?

Unfortunately, the only option when the borrower doesn’t want to work towards keeping his home is to refer the file to our foreclosure attorney, fortunately, the attorney is the first team member we acquire when we invest in a state.

We should have this asset on the market by fall unless the borrower changes his mind and actions. I will update as things move forward.

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