In Pre-Foreclosure, Can I sell off half of my acreage to catch up house payments

[tshores]

What is the name of your state? Michigan


I am facing pre-foreclosure on my home and 10 acres. I just listed the house to sell. I was approached by a neighbor to buy off 5 acres off the property. Can I sell this to him and what would I use, a quit claim deed? My mortgage is on the house and 10 acres. This would enable me to catch up my payments and I thought I could revise my listing with the realtor to sell the house on 5 acres. Any advice? Can I do this?

Originally Posted by tshores

What is the name of your state? Michigan


I am facing pre-foreclosure on my home and 10 acres. I just listed the house to sell. I was approached by a neighbor to buy off 5 acres off the property. Can I sell this to him and what would I use, a quit claim deed? My mortgage is on the house and 10 acres. This would enable me to catch up my payments and I thought I could revise my listing with the realtor to sell the house on 5 acres. Any advice? Can I do this?

Q: Any advice?

A: Yes, ask your lender if you can do this. If so, you will get a partial release of the mortgage and (if the title is otherwise clear) you can sell it.

[tshores]

Originally Posted by tshores

What is the name of your state? Michigan


I am facing pre-foreclosure on my home and 10 acres. I just listed the house to sell. I was approached by a neighbor to buy off 5 acres off the property. Can I sell this to him and what would I use, a quit claim deed? My mortgage is on the house and 10 acres. This would enable me to catch up my payments and I thought I could revise my listing with the realtor to sell the house on 5 acres. Any advice? Can I do this?

Thanks for the response. Another question, #1, do you think the mortgage company would be willing to work with me to do this, sometimes they seem unwilling to work with people who are facing hardships. If they refuse, could I still do it? Thanks so much.

Originally Posted by tshores

Thanks for the response. Another question, #1, do you think the mortgage company would be willing to work with me to do this, sometimes they seem unwilling to work with people who are facing hardships. If they refuse, could I still do it? Thanks so much.

Q: do you think the mortgage company would be willing to work with me to do this, sometimes they seem unwilling to work with people who are facing hardships.

A: I wouldn't have the slightest idea.



Q: If they refuse, could I still do it?

A: No; if you try to sell the land, the mortgage (or deed of trust) probably has a due on sale clause, meaning that if you sell or try to sell, then the whole amount is due immediately.

Obviously, they really wanted the whole ten acres or you would not have gotten a loan on the ten acres.

[nextwife]

Odds are, the mortgage company would want an appraisal (at your expense) to show that the remaining collateral after accreage sell-off supports the loan ratios. Of course, if the land has value sufficient to pay off the loan, they would very likely agree.

DO check with your municipality to see what is needed in order to create a legal land divisions, if this is a single tax parcel now. These things take time, they must often have municipal approval, and the newly created Certified Survey Map would need to be created by a surveyor and recorded BEFORE the sale of that land as a seperate parcel could occur. The lender would need to sign off on that as well. I believe they may need to sign the CSM BEFORE it can be recorded. So start getting your ducks in a row. This is NOT something that can happen overnight.

[vahomebuyer]

It does take time to subdivide an existing piece of land. If you are interested in doing this you may want to try and negotiate an extension w/ lender. If nothing else sell your home thru a realtor if it can be done within a short time depending on the timeline for the property being foreclosed upon. You can also work something out with your neighbor and draft a promisory note of sorts for him to pay you part/or whole of the property upfront to allow you to catch up and then go thru the whole subdivision process so there no longer is a pending foreclosure on the line. The lender will still have to approve of the subdivision and make sure you tell them what you are doing as if you dont you may unintentionally trigger the DOS clause that most loans have attached to them. I can sent you and article if you would like on the details just shoot me an email thru my contact sheet.
good luck to you

V