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 Undercover Amish Mafia Member
Posts: 9992
    
Location: Kansas | I found a house that is recently in foreclosure, it's just down the road from my grandparents pasture...absolutely beautiful home on 10 acres. I called the man who has the home, he has yet to list it he said, but I'm meeting with him this sunday to take a look at the house.
My question is....I was told it is a pain to deal with homes that are in foreclosure. The man said I would just basically take over the house payments, without having to put a down payment down. Is this true? What do I need to expect? |
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 Buttered Noodles Snacker
Posts: 4377
Location: NC | While looking for a house the problem I found with most foreclosures is they usually come 'as is' and that made it hard to get financing on with out 6-20% down. This was also true for properties with 10acres or more. House buying is SOOOOO frustrating! good luck sounds they a great set up. |
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 I keep my butt inside
Posts: 3281
Location: Weatherford, Texas | You will probably still need a down payment, but talk to the mortgage company and see if they will do a short sale. It saves everyone money and then you are essentially taking over the payments. |
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 Midget Lover
Location: Kentucky | We bought a foreclosure, and I didn't find it any harder to deal with than a non-foreclosure house.
We went through a Realtor and they did everything for us. The house was sold as-it, so we opted out of a inspection because the house we bought was trashed. It was a great deal. I would do it again. We did put 20% down, but we didn't have to do that much. |
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Undercover Amish Mafia Member
Posts: 9992
Location: Kansas | cooper08 - 2014-09-16 8:35 AM You will probably still need a down payment, but talk to the mortgage company and see if they will do a short sale. It saves everyone money and then you are essentially taking over the payments.
What would be a short sale? Sorry...kinda new at these kind of things! |
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  That's White "Man" to You
Posts: 5515
| Foreclosure is a process that last at least 90 days, giving the borrower a chance to bring the loan current. If that doesn't happen then ownership of the house is transfered into the banks name. It is then a bank that is selling the property. Some banks are easier than others to work with, if it was a FHA type loan then it usually takes longer to get all the layers of approval needed for the sale.
If the house is selling before or during the 90 day period it is a short sell, in which the bank is willing to accept less than what is owed. This can take forever to get the approvals again depending on the bank. My brother-in-law purchased a home on a short sale and it took over 1 year complete.
When a bank takes a property back after the foreclosure it is considered OREO property, when a bank finances an OREO property they are required by law to receive at least 10% down payment from the buyer. So if you don't have the 10% down payment, use an alternative financing option such as a different bank or mortgage company.
If you can possibly afford a 20% down payment it will save you soo much time, interest and mortgage insurance over the life of the loan. Do what ever you can to scrape it together. I promise you wont be sorry.
Along the lines of taking over the payments, in somecases that is possible, but you will want to see that in writing from the bank with completely new loan documents with your name on it. Do not under any circumstances make payments on his loan.
Last bit of advise, take all emotion out of the process. It is a transaction, if you let emotion drive it, you could pay way more than it is worth.
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Undercover Amish Mafia Member
Posts: 9992
Location: Kansas | Whiteboy - 2014-09-16 9:26 AM Foreclosure is a process that last at least 90 days, giving the borrower a chance to bring the loan current. If that doesn't happen then ownership of the house is transfered into the banks name. It is then a bank that is selling the property. Some banks are easier than others to work with, if it was a FHA type loan then it usually takes longer to get all the layers of approval needed for the sale.
If the house is selling before or during the 90 day period it is a short sell, in which the bank is willing to accept less than what is owed. This can take forever to get the approvals again depending on the bank. My brother-in-law purchased a home on a short sale and it took over 1 year complete.
When a bank takes a property back after the foreclosure it is considered OREO property, when a bank finances an OREO property they are required by law to receive at least 10% down payment from the buyer. So if you don't have the 10% down payment, use an alternative financing option such as a different bank or mortgage company.
If you can possibly afford a 20% down payment it will save you soo much time, interest and mortgage insurance over the life of the loan. Do what ever you can to scrape it together. I promise you wont be sorry.
Along the lines of taking over the payments, in somecases that is possible, but you will want to see that in writing from the bank with completely new loan documents with your name on it. Do not under any circumstances make payments on his loan.
Last bit of advise, take all emotion out of the process. It is a transaction, if you let emotion drive it, you could pay way more than it is worth.
You are awesome! Thanks so much! I'm scraping by as much as I can to have a down payment if my bank approves the loan since I would be a first time home buyer. |
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Elite Veteran
Posts: 629
Location: Roping pen | Also to add, make sure any 2nd/3rd/4th liens are released and you go thru a closing agency to make sure title is clean (ie title insurance).... |
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 Elite Veteran
Posts: 1119
| My husband bought a foreclosure 5 years ago (we were dating at the time). The house had been empty for over a year. The whole process took about 4 months, if I remember right. He got an FHA loan, and I don't think he put much money down - maybe 3%. We got an inspection and were able to negotiate the price down even further with the results. So even though it was sold "as is" they were still willing to negotiate. |
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 Ditch the Stirrups
Posts: 5369
Location: Sorrow Not! Defending against workplace bullies | I was on the other side of a short sale (had to short sell my own house). The people buying it got a GREAT deal and it took about 5 mos. The house was sold as is. They paid a little over what I had originally paid over 10 years ago after making $150K in improvements. Realtors like to wrap these things up before the end of the year when short sale or foreclosure laws can change. You should try ro find a realtor very experienced in these types of deals because there is a lot of back and forth with the bank. Good luck!! |
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 Veteran
Posts: 164
| I am a realtor and I am an assistant to a Fannie Mae Foreclosure listing agent in Oregon. Your transaction will completely depend on the type of foreclosure, the bank involved, and your lending. The best thing you can do is go through the listing agent, since they know the most about how the process works. Always know there are many lending programs, so the agent may be pushing a certain kind, but you should talk to a lender as well, especially one that lends on foreclosure properties often. For example, our Fannie Mae transactions can be closed in 2 weeks, or take up to 6-9 months in very rare situations. Always get a home inspection because it will never hurt to ask for compensation for a big issue that was not disclosed to you. Since you are working with a bank, there will be no issues disclosed, as they will claim exemption. At the least, you have an inspection which allows you to know what kind of money you'll need to put into the home. With a short sale, it will depend on how many lien holders and the banks involved. Usually expect at least 3 months til close, frequently around 6 months though. A year is more of a rare situation. I would not be scared of purchasing a foreclosed home, just be prepared, as it will not be perfect. But definitely get your inspection done!!! For example- if you don't get an inspection done and there is foundation failure or termites, or something awful, you've just bought a lemon! If you get your inspection, and the bank won't agree to do repairs or lower purchase price, you at least have the opportunity to walk away! Hope this helps, let me know if you have any more questions. Foreclosures are usually easier than short sales. |
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Undercover Amish Mafia Member
Posts: 9992
Location: Kansas | I went to look at the house last night when I rode....it definitely needs a bit of TLC as the previous owners trashed it. It needs new windows, lots of work to the yard...and all the junk has remained there. I'm still meeting with the gentleman on sunday. I don't mind a few month process...not wanting to jump into something quickly...I would like to take my time and get it right so I'm not SOL. LOL. |
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