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Vacant land – 5 year note interest only payment

Home Forums General EHTrust/EHT Topics and Creative Real Estate Financing Vacant land – 5 year note interest only payment

This topic contains 9 replies, has 0 voices, and was last updated by Avatar of unclejim unclejim 8 years, 7 months ago.

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  • #6757
    Avatar of unclejim
    unclejim
    Participant

    Vacant land purchased for 2.4M with down payment of 700K = 1.7M principle balance

    5 years have passed and bank says fair market value is now 1.2M The bank will not refinance the loan and is demanding the owner pays the 500K difference or they have no alternative but to foreclose on the property. The owner does not have another 500K to put into the property.

    Is this a HOPES equity share solution?

    #33698

    @unclejim wrote:

    Vacant land purchased for 2.4M with down payment of 700K = 1.7M principle balance

    5 years have passed and bank says fair market value is now 1.2M The bank will not refinance the loan and is demanding the owner pays the 500K difference or they have no alternative but to foreclose on the property. The owner does not have another 500K to put into the property.

    Is this a HOPES equity share solution?

    I would thinks so. Of course there’s only one way to find out. Get the owner to place it in a simple trust, assign you an interest in the trust and make an equity share hopes offer to the bank.

    #33699
    Avatar of sstanton
    sstanton
    Member

    Jim,

    I would suspect that this would be a 3-arck property too. owe 1.7 mil and worth 1.2 mil.

    I don’t know what your level is but, if accepted, probably worth more to you than HOPES.

    Check with Bill before launching into HOPES.

    #33700

    With HOPES you are not typically concerned about the loan balance. You are mostly concerned about the affordability of the payments. That’s not to say that you couldn’t also ask the bank for a reduction of the principle balance too. If the bank accepted this under a HOPES Proposal, you would make $60,000 NOW!

    To be fair, I have no idea how to figure what profit you would make under 3arc or when it would be paid.

    I believe that giving the these three options to the bank, they would go for HOPES before accepting a Short Sale or choose to fight it out with claims of fraud.

    BTW, one of the reasons a bank may choose to accept HOPES is to avoid the probability of litigation. I have been told that if the bank chooses not to accept the HOPES Proposal, a suit would be filed and pursued against the lender to have the mortgage eliminated.

    #33701
    Avatar of sstanton
    sstanton
    Member

    Ruby gets 50% of Bill’s profit
    Emerald gets 25% of Bill’s profit

    So, $1.2 mil home, owner gets 90% new lien or owes us $1.08 mil.

    Bill’s estimated profit will be $432,000

    Emerald about $108,0000
    Ruby about $216,000

    About 9 months to finish. We carry most of that for 3-5 years. Upon the owner getting a 50% LTV loan, there is about 10% that will be split too. So, after expenses, you could get $15,000 to $30,000 in cash in about 9 months. (numbers subject to change at any time.)

    Also, Gary has completed over 100 properties both commercial and land before joining with us. HOPES ?

    Their payment could be as much as 50% less than it is now, for the next 3-5 years. Plus, they can pay down principal dollar for dollar. We carry the balance interest free.

    Again, check with Bill on doing Land.

    #33702
    Avatar of sstanton
    sstanton
    Member

    One other thing, Jim, I am just giving you the 3-ARCk option. Take the course that looks like the best fit for you and you land owner.

    #33703

    Stu, thanks for the numbers.

    It is obvious that NARS Members have many awesome options for homeowners and sellers.

    There are lenders already doing Equity Share Arrangements and others that would if they could figure out how to protect the whole transaction and secure themselves. The EHTrust is the ONLY know way for them to do that.

    I believe that for the cost of a simple trust, that HOPES is the best place to start. Then if the bank chooses not to play, we go for the jugular, which may include 3-ARK.

    #33704
    Avatar of unclejim
    unclejim
    Participant

    @Scott_L._Moyes wrote:


    There are lenders already doing Equity Share Arrangements
    and others that would if they could figure out how to protect the whole transaction and secure themselves. The EHTrust is the ONLY know way for them to do that.

    I did not realize that. Were any of them done by Dave? [/b]

    #33705

    @unclejim wrote:

    @Scott_L._Moyes wrote:

    There are lenders already doing Equity Share Arrangements
    and others that would if they could figure out how to protect the whole transaction and secure themselves. The EHTrust is the ONLY know way for them to do that.

    I did not realize that. Were any of them done by Dave? [/b]

    Equity Sharing is not new to banks. FHA even used to have an Equity Share Mortgage available but it lost it’s popularity with borrowers many years ago as it became easier to get financing and the fact that borrowers didn’t want to share the appreciation with the lender.

    The new HAMP Supplemental Directive, suggesting and authorizing Equity Sharing only came out in Oct 2011 and the first proposals hit the desks of the lenders only a few weeks ago. To date we have submitted almost a dozen and not one has been rejected. Dave has received communication for lenders who have indefinitely postponed sale dates to have our HOPES Proposals reviewed by the bank’s accounting and legal departments.

    Again, since the Directive, no one else that we know of has figured out how to make an Equity Share work with a lender and protect all the parties. The HOPES Equity Holding Trust Arrangement has now gotten the attention of Lenders and Politicians.

    #33706
    Avatar of piloto
    piloto
    Member

    Scott said:

    BTW, one of the reasons a bank may choose to accept HOPES is to avoid the probability of litigation. I have been told that if the bank chooses not to accept the HOPES Proposal, a suit would be filed and pursued against the lender to have the mortgage eliminated.

    Who would be funding that law suit?

    #33707
    Avatar of dave salcido
    dave salcido
    Member

    @piloto wrote:

    Who would be funding that law suit?

    I would become a pro se litigant as a damaged party. I would also include an associate that is well versed in these type of pro se complaints.

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