Excuse my language but if you were there, you’d say the same thing if you heard the story.
My father wanted me to talk to this guy about a potential trouble he was in with his house. Essentially, he had bought a property that was already sold to another person.
I actually can’t recall who bought the property first but I think you’d agree that whichever one it is wouldn’t matter. YES. A property can have two home owners but not without the consent of one another right?
So let’s just call him Mr Ajay. Mr Ajay bought a 2 family property in Newark. A few years later, he realized he couldn’t afford to keep the mortgage payment up even with a 2nd unit that could be rented out for rental income.
Of course, the decision to get rid of the property did not happen until his mortgage payments had started to linger.
… LIGA LIGA LI. Do you know what that is? It means late payments as a result of procrastinating on offloading a non-performing asset.
The bank had filed a lis pendens already. This is usually the point where people decide (not find out) that they can’t afford to hold on to a property.
By the way, that’s not necessarily financial irresponsibility. It’s just ‘not responsible.’ <-- SAME THING? oh.. yea... Anyway. He decided to use short sale to get rid of the property because..
He owed $400,000 on a property that’s worth less than $200,000. That, my friend, is called negative equity. The only way to sell a property in such situation is to get the mortgage bank to agree to a short sale.
Here is the worse part…
Mr Ajay was able to find a buyer who was willing to sit around for 7 months that the short sale took to be approved. In fact, they were at the closing table when the title search revealed another outstanding $400,000+ that needed to be paid before escrow can close.
Ooooopz I did it again.. Ok I didn’t do it.
But that my friend is what you call deep sheethhhhhh with a thhh th.. right.. LOL
Really, its not funny.
See, it’s not uncommon to find a second mortgage, a home equity loan or minor liens in a title search at closing. But finding a whole 1st mortgage lien on another person’s name entirely was a new one when he told me.
Let’s break it down…
The bank agreed to a short payoff of $180,000. Buyer is at the table with money at closing. The loss mitigation officer at the bank is expecting $173,000 and change because they agreed to pay Mr Ajay’s outstanding property tax bill and other closing costs.
But now there is a $400,000 that needs to be paid or else… GRID LOCK.
To cut the long story short, what that meant is that someone pulled out another $400,000+ mortgage and/or sold the same property to someone else ENTIRELY simultaneously as they were selling it to Mr Ajay.
SANGBA FO! << never mind what means if you don't know... Of course, my only advice at that point is for Mr Ajay to consult with a legal personnel. Me nat know! How can you avoid this type of trouble in your real estate transactions? Simple. You need trust worthy people in your real estate transaction team. Just because you have an attorney is not enough. An attorney was also involved in this transaction with a title company and all. Of course, you should always use an attorney. What does trust worthy team look like... Hello... Voila... STAY TUNED FOR MORE HORROR STORIES SO YOU CAN AVOID IT COMPLETELY. Real Estate is beautiful but... agboro lan so fun omoluabi. LOL. Thanks for reading. Ola for OLALawrence.com PS: If you missed that part. Contact me for all you real estate needs.