Buying a foreclosure home

[Blake Spiller]

Hey BP community! I just wanted to reach out for some advice about possibly buying a foreclosure home. I saw in my local newspaper about a home going up for foreclosure and I think it has the possibility of being a good starter investment for me. I haven’t made my first initial purchase of a rental property but I definitely want to and have plans to do so. I have a home equity loan being processed and I’m currently active in finding new deals. So one of my questions is would it be wise for me to try to contact the current home owner to see if they would be interested in selling the home before it went to foreclosure or at least see if they would be willing to give me any additional details about the home such as what banks holds the mortgage or if they are multiple liens on the home. Or do I just wait for it to go to foreclosure before attempting to buy it? Also if the owner does give me the bank that holds the mortgage should I call the bank to see what they would be willing to take to sell the house? I’m new to all of this but motivated to take action and make calls to whom ever so any help would be much appreciated. Thank you all in advance for your input and time!

[Gregory Wilson]

In Hamilton County, Ohio, the banks will  not speak with you other than through their attorney if there is a foreclosure or their realtor if the home has been recovered by deed in lieu of foreclosure.

However, houses are frequently, almost routinely, removed from the sale process when the borrower makes a catch up payment or two or when the bank perceives some risk to a sale meaning that the property may leave a deficiency. They will work with the buyer to re-set the loan and terms because when they foreclose and bid the property in for their loan amount which they mostly do around here, they have to recognize the loss as a non performing loan which has a multiplier effect on their lending base. As one banker so eloquently put it: "A rolling loan gathers no loss."