Forget about chasing down short sales and dealing with lenders who don't want to deal. Instead, I suggest going straight to the source, which is often the very same lenders who refused to deal but now must. These are lenders who have taken back a home in foreclosure.
Regardless of government-sponsored voluntary bail-out programs designed to help home owners in foreclosure -- the programs which are rightfully called "too little, too late and too voluntary" by The New York Times -- foreclosures will continue to rise throughout 2008. This means more banks will end up owning properties, which is bad news for sellers in default and bad news for the banks but could mean good news for first-time home buyers and investors.
The deals are out there. But don't make the mistake of thinking the bank is going to hand you a home on a silver platter. Banks hire lawyers to draw purchase contracts that favor the bank. And banks hire hard-nosed negotiators. Make sure you hire a real estate agent versed in dealing with REOs, an agent who will represent your interests over the bank's . . . read more about buying foreclosure REOs.
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At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.
Comments
Elizabeth:
Good afternoon! I have a question regarding foreclosures that I hope you can assist me with. I have a property I may be interested in purchasing that is currently in foreclosure (property is located in OH), the auction is scheduled for mid February. My question is, what happens to the second mortgage and their lien when the home is auctioned off? That is if I were to purchase this property through the auction would I then be responsible for the second mortgage or is it totally discharged through the foreclosure? As I understand it the proceeds from the sale at auction go first to the taxes, then to the 1st mortgage holder, and then if anything is left to the second mortgage holder. The proceeds from the sale will not be enough to cover all of these expenses, and I want to make sure the second mortgage will be fully discharged and their lien will be released and I will receive the property with clear title. Also, what documentation is provided reflecting the release of the liens? Thank y Elizabeth, I look forward to your response!
Regards,
J.L. Long