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Updated almost 9 years ago, 02/02/2016
How to keep a home in foreclosure with no paperwork
My parents separated in 2012, my father was the one to initially leave. When he moved out, I lived with my mom in our family home, but eventually she moved in with her new partner. At the time she decided to move, she offered that I either move as well, or keep the home and pay rent to her. I chose to pay rent and stay. I am still in the same home, now living with my husband and 3 dogs. This home isn't where we intend on staying for the rest of our lives, however, I feel like letting this home go would be silly. The house has been in foreclosure for going on 6 years this August (I believe). We have a feeling that the bank has lost the deed/paperwork to the home. I am curious what measures we could take so that we can guarantee our home won't be taken away, and we can own it free and clear.
I doubt bank lost it unless you have evidence to the contrary. The home just isn't as much of a priority to them as it is to you so they are probably not responsive to inquiries.
Even if they lost their paperwork, the county would have everything necessary to reproduce the paper trail and confirm the bank's position.
I would start by resetting your expectation. It sounds like you grew up in that house and it may seem like YOUR house, but on paper (wherever that is), it is the bank's house at this point.
Whether they choose to claim it is a different story.
If you want to keep the house I would contact a real estate attorney and explain your situation.
Your most likely recourse if you wanted the house would be make an offer to the right person at the bank. Maybe if crafted and presented properly they will go for the equivalent of a short sale and get some money for the property and get it off their books because right now it is costing them to pay for taxes each year. This adds insult to injury for them since they are being paid for the thousands of dollars they lent out and are now having to pay for money they are not getting.
If the bank decides to put it on the market then you'll have to compete with other potential buyers.
Also keep in mind that an investor may already be aware of this problem property (from the bank's perspective) and might be working on making an offer to the bank as well.
I wish you a speedy and fruitful resolution.
Originally posted by @Miguel "Mike" Perez:
I doubt bank lost it unless you have evidence to the contrary. The home just isn't as much of a priority to them as it is to you so they are probably not responsive to inquiries.
Even if they lost their paperwork, the county would have everything necessary to reproduce the paper trail and confirm the bank's position.
I would start by resetting your expectation. It sounds like you grew up in that house and it may seem like YOUR house, but on paper (wherever that is), it is the bank's house at this point.
Whether they choose to claim it is a different story.
If you want to keep the house I would contact a real estate attorney and explain your situation.
Your most likely recourse if you wanted the house would be make an offer to the right person at the bank. Maybe if crafted and presented properly they will go for the equivalent of a short sale and get some money for the property and get it off their books because right now it is costing them to pay for taxes each year. This adds insult to injury for them since they are being paid for the thousands of dollars they lent out and are now having to pay for money they are not getting.
If the bank decides to put it on the market then you'll have to compete with other potential buyers.
Also keep in mind that an investor may already be aware of this problem property (from the bank's perspective) and might be working on making an offer to the bank as well.
I wish you a speedy and fruitful resolution.
Miguel, my dad is a general contractor working with investors. One of the investors he works with has told him he made an offer over a year ago, but we have not heard anything. My dad said he's not sure the deal ever went through. The house has moved banks countless times, within the past 6 years. A bank called last year about this time and gave us a "warning," but nothing has happened so far. We actually haven't even reached out to the banks or inquired at all.
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You won't end up with the house for free. At some point, the current note holder will foreclose. People try to make half *** offers, the wrong way, all the time....it means nothing.
Hi Wayne,
What's the right way to make an offer?
This would help in this situation.
Originally posted by @Wayne Brooks:
You won't end up with the house for free. At some point, the current note holder will foreclose. People try to make half *** offers, the wrong way, all the time....it means nothing.
Wayne, I need a solution and not necessarily the negatives! I'm not asking to have the home for free, however, I am looking for a solution(s) and how to approach those solutions. :)
Ma'am,I would hire a good real estate agent and let them represent you to the bank.If you're not sure who owns the note on the house.do a title search and get all the information you need like how much is owed at this point.Then have the agent run comps to see what the home is worth as of now and after any repairs have been made.Arm yourself with complete information about the situation including your ability to get a loan by getting pre-qualified before your agent speaks to the bank.The bank officials are more apt to listen to your story if you have a pre-qualifying document that shows you are derived
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@Miguel "Mike" Perez I would assume with the note this far in default, it is definitely under water? If so, nothing can be done without contacting the current note/mortgage holder, their loss mitigation dept. They would require cooperation of all partis on the title/loan, and have to go through the normal short sale process. Generally, a family member will Not be allowed to buy a property in a short sale. However, if the bank does think they some enforceability/documentation defect (unlikely) they might be willing to consider it.
Originally posted by @Wayne Brooks:
@Miguel "Mike" Perez @Leah Ezra I would assume with the note this far in default, it is definitely under water? If so, nothing can be done without contacting the current note/mortgage holder, their loss mitigation dept. They would require cooperation of all partis on the title/loan, and have to go through the normal short sale process. Generally, a family member will Not be allowed to buy a property in a short sale. However, if the bank does think they some enforceability/documentation defect (unlikely) they might be willing to consider it.
Thanks.
Sounds like the banks like to keep family interests out of it to reduce liability just like hard money lenders (HML) don't like to loan in owner-occupy situations. Make things really messy if the loan has to be called in.
Leah,
Regardless of which way this goes, you were going to have to pay for this home. I'd prepare plan A to try and legally buy it from note holder, or plan B, use that money you would use to buy the home to buy another home or investment.
You probably have emotional ties which will NOT help you in making the decision. Try to be objective if you decide to go after this.
If you want it, go after it through the right channel even if you get no for an answer the 1st or 50th time. Just make sure that once you get it, it is what you want and that the money and time you spent on it wouldn't have been better spent on getting another home or investment.
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@Miguel "Mike" Perez Actually their prohibition on short sales to family members/related parties is purely an attempted safeguard to avoid "sweet heart deals" where they may get less than market value, and if it were allowed it would also encourage many to try and get rid of part of their loan balance by simply running it thru a family member in a short sale, and essentially retaining the property. Same reason they don't allow assignments.....if someone is flipping a contract for a profit, then the bank isn't getting full fair market value in that contract.
Originally posted by @Miguel "Mike" Perez:
Originally posted by @Wayne Brooks:
@Miguel "Mike" Perez @Leah Ezra I would assume with the note this far in default, it is definitely under water? If so, nothing can be done without contacting the current note/mortgage holder, their loss mitigation dept. They would require cooperation of all partis on the title/loan, and have to go through the normal short sale process. Generally, a family member will Not be allowed to buy a property in a short sale. However, if the bank does think they some enforceability/documentation defect (unlikely) they might be willing to consider it.
Thanks.
Sounds like the banks like to keep family interests out of it to reduce liability just like hard money lenders (HML) don't like to loan in owner-occupy situations. Make things really messy if the loan has to be called in.
Leah,
Regardless of which way this goes, you were going to have to pay for this home. I'd prepare plan A to try and legally buy it from note holder, or plan B, use that money you would use to buy the home to buy another home or investment.
You probably have emotional ties which will NOT help you in making the decision. Try to be objective if you decide to go after this.
If you want it, go after it through the right channel even if you get no for an answer the 1st or 50th time. Just make sure that once you get it, it is what you want and that the money and time you spent on it wouldn't have been better spent on getting another home or investment.
My husband and I are actually planning on moving to San Diego within the next couple years, so I am not necessarily planning on living here. However, if the house could potentially sit here for years, I don't want to just give it back. I feel that it could potentially be an investment, it's a perfectly fine house and needs minor work, all of which is cosmetic. The house is fairly new, after 2000's, so it's up to date. My thought process is we've been here for 6 years in foreclosure, and we still haven't heard anything. If it were to sit for some plus years, I would rather find a way to secure it and use it as an income source, rather than just give up.
Out of curiosity, have you been paying rent for the whole six years of foreclosure status?
Found this article in concerns of a law passed in the Las Vegas area in regards to squatters or "unlawful occupancy". Seems that there is a huge problem in Vegas and maybe the bank is perfectly happy having someone in the property who is taking decent care of it for free.
Originally posted by @Ryan Jackson:
Out of curiosity, have you been paying rent for the whole six years of foreclosure status?
Found this article in concerns of a law passed in the Las Vegas area in regards to squatters or "unlawful occupancy". Seems that there is a huge problem in Vegas and maybe the bank is perfectly happy having someone in the property who is taking decent care of it for free.
Ryan,
we pay utilities and the HOA.
