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Foreclosure

Buying our first home that is in foreclosure, why is it taking so long?

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Question: My husband and I are in the process of buying our first home and we are very confused as to what is going on and no one can help us. Here’s the situation…We put in an offer on a house and the offer was accepted after negotiations. Within 2 months the house went into a short sale because the owners did not have the money. Since then (it’s been 6 months) Bank of America has reappraised the home and put it into foreclosure (or so I’m told). Our real estate agent said that they can get the foreclosure postponed…What does this mean? Can they foreclose on a house that has an offer on it? Would this mean that the contract is no longer valid? I would appreciate any help you can give us. Thanks!

Answer: – It sounds like you made an offer to the bank for less than what is owed on the property, which is a short sale. And from what you say, the bank accepted the offer but there may have been some other requirements from the initial seller in order to get everything approved. As a buyer, it’s not uncommon to wait for MONTHS and if you are patient enough it could even be a year or more before you are able to buy a property in foreclosure. This is all because of bankruptcies, settling with 2nd and 3rd lien holders, uncooperative sellers, etc. To answer your question, yes, the bank can foreclose on a property even if there is an offer because they are waiting for certain requirements to be met. Yes, they can postpone the foreclosure auction as long as the bank sees a legitimate reason to postpone. Don’t give up. Keep working close with your agent, I’m sure they are on top of the situation…Just don’t be surprised in you have to wait awhile. Most home buyers get frustrated waiting and move on to another home. Good Luck

House Foreclosed : Still Paying

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Question: My son is paying on his house that was foreclosed a couple/few years ago: why does this happen after someone has bought that house?

Answer: – Well it’s probably because he agreed to pay a certain amount over time to satisfy the debt. It’s was either that or they probably told him they would file a judgment against him. That’s my guess.

Bank foreclosing on home – What will the bank typically bid at the sheriff’s sale?

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Question: A bank that is foreclosing on a home holds a first and a second mortgage. The first alone is more than the home is worth. What will the bank typically bid at the sheriff’s sale? Would it bid market price minus second mortgage lien, because the buyer would still have to be paid off?

Answer: – Typically the opening bid is the amount you owe plus foreclosure fees, back payments, etc. If someone bids at the foreclosure auction, then the highest bidder gets the property. If no one bids, the bank takes back the property and sells it through a real estate broker. If the bank does not get paid the full amount they are owed, they can 1099 you for the difference and count the loss as income to you so you have to pay taxes on it.

How long after foreclosure do I have until I have to be out of my house?

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Question: How long after foreclosure do I have until I have to be out of my house?

Answer: -Well it depends on your states laws as to how much time you have until you have to vacate your home. If you live in a trust deed state where the redemption period is before the auction, then you’ll have a few weeks to a month to leave your home. If you live in a state where foreclosure is filed judicially, typically the redemption period is after the auction so again depending on your states laws and redemption period after foreclosure, it could be a few months up to six months.

The best way to find out how long after foreclosure until you have to be out of your home is to call up a title company and ask them or you can visit your State Laws page and see when your redemption period is.

Usually you’ll receive a notice from the bank or the individual who purchased the home at auction. There is a small chance that if an investor picked it up, they may allow you to stay there and rent. I say small chance because they are going to question whether or not you have the means to pay them rent when you weren’t able to pay the bank mortgage. You will have to convince them that you are in a good enough situation where you can pay them a monthly rent or they will evict you.

Either way, you’ll know when you need to be out because you’ll see notices on your door or delivered in person. Until that point, you will want to make arrangements with finding another place to live because chances are high the property will go back to the bank and they will ask you to leave. So don’t sit around and wait for it to happen, I’d start looking now for another place and be ready.

I had an investment property go into foreclosure 9/1/09 in Arizona, Maricopa county.

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Question: I had an investment property go into foreclosure 9/1/09 in Arizona, Maricopa county. The home has a first mortgage for 160k and purchase money HELOC for 20K. Neither loan was ever touched after the purchase. On Aug 17, 2009 Countrywide sent me a letter informing me the HELOC will have a new servicer Real Time Resolutions, INC.
On 9/5/09, I received what seems to be an attempt to collect from Real Time Resolutions, INC. it states I have, “30 days to dispute the validity of this debt or any portion thereof, this office will assume this debt is valid.” The payoff they are requesting is $ 21,193.74 which I am assuming is the HELOC plus fees.

Is this allowed or legal, can a new servicer attempt to collect on the Heloc since the home has already gone into foreclosure? Should I meet with a lawyer or am I okay ignoring these letters?

Please advise and thanks for your time,

Aaliyah, Gilroy CA

Answer: -This is normal protical and yes since your loan was “sold” to a new servicer, they can try to collect the debt. So they will send you certified letters in the mail every month telling you how much you owe and that it’s an attemt to collect the debt. You don’t need to respond unless you are disputing the action and I’m sure they will try to call you every week and threaten you to pay…or else. By sending these letters, it gives them the right to proceed with foreclosure if they want. However, we all know they won’t unless there is substancial equity in the property. More than likely they will just write it off as a loss and 1099 you for the difference.