House getting ready to be foreclosed on

[Bianca G.]

Hello BP Family!

I have come across a deal where the homeowner owes $15K in mortgage payments  and is on the verge of a foreclosure. The current owner owes $120K in loan(The current value of the house is $165-$170K)  no other liens and is asking $8000 to transfer the house to my name(kind of cash for keys). I have never done a deal like this before so am not sure what would be involved and if it is safe to work a deal like this. How to handle this and any pointers that I should make sure of.What all questions I should be asking. 

Any help will be greatly appreciated. Thanks!

[Jon Holdman]

This sounds like you want to buy the place "subject to" the existing mortgage.  You would also need to pay the $15K of back payments and fees to bring the mortgage current. So, you'd be into it for $15K back payments + $8K to the seller plus the $120K loan for a total of $143K.  That's a small discount vs. the $165K value. So you would want to be HIGHLY confident of that value.  Do get a title search to be sure there truly are no other liens.  Do verify that there is only $15K needed to cure the mortgage.  And realize there is risk with a subject to deal.   Lots of posts on that topic.