The home I want to buy is lost in paperwork somewhere

[Donna Drake]

Here I am at BiggerPockets again looking for answers. You guys are great and maybe you can help.

I finally sold my house. I have had my eye on a empty home for over six months. It has be empty since April 2009.

The owner of the house passed away, and the children didn't want the house as it is not worth what was owed on it.

National Bank of AZ sold the house in 2007 to a mortgage company in NJ. I called them, and all they did was ship me to a web-site for pre forclosure and foreclosure homes. It wasn't there.

They didn't have the house under the National bank loan number and that is the loan number I have.

Now I'm not even sure NJ has it. I called the family attorney of the deceased owner, hoping he will call me back with current loan information, but I have not heard back yet.

I also was told by this lawyer that it should be no problem to buy the house right away, even if I have to rent it from them while paperwork is completed.

I have to be out of my house by Sept 16, and I need this information now! I have hit a brick wall!

This is my question. The mortgage company in NJ deals with Mortgage-backed securities! this company seems so big! I don't understand what that means, and why the previous owner would choose them.

They offer things like Private label Solutions and I think all properties are pooled. HELP! What is all this? I think they have the house I want, and I need to buy it. They just don't seem to want to help me at all.

Right now I am homeless!

this would also be a cash sale. Nothing difficult.

Do any of you know how I should proceed? This little house is my dream home. I want it so badly, and there was recently a sign on the door from a company called safe guard saying the property has been abandoned and the lender would be notified they have to clean up the yard and the locks would be changed. Nothing ever happened with this either.

All information any of you have will be very much appreciated! I am so stressed and just need to know what to do, and what kind of mortgage company I am dealing with!

Thank you all so much,

Donna

[Jon Holdman]

Donna, here's some advice you're not going to want to hear. You say "I have to be out of my house by Sept 16". You seem determined to buy the house you're talking about here. And you want to move into it on 9/16. Its not going to happen. As you're figured out, this house is lost in limbo of loan services, investors, and CDOs. It's going to take time to unravel the ownership and responsibilty and get the property to a position where someone can buy it. That could well take many months. That's when it could be listed for sale. After that, an offer has to be made, accepted and closed. Even if you could make that offer today (8/27/10) I do not believe it could possibly be closed by 9/15/10. That would be an amazingly quick close. Possible if all the paperwork and title was clean, but that's not the case here.

Further, even once there sort it out and get it listed, there's a good chance someone else will buy it. My standard advice to anyone trying to buy a REO is to find 10 REOs they like, makes offers on all of them and their odds of buying one are pretty good. The odds of buying a specific one are very low.

I realize you say this is your "dream house" but ultimately its just a house. Are there ABSOLUTELY no other houses that would make you happy? Have you looked? You're stressing yourself out by trying to buy this specific house. And I just don't think you will, in the end, be able to buy it.

Certainly I believe there is zero chance of you moving into this house on 9/15 by any means other than breaking in a squatting. Maybe that works. Maybe nobody ever sorts out the ownership and 10 years from now you can claim it by adverse possession. More likely someone does eventually figure out who owns it and they come and evict you.

Here's what I would do, given you're determined to buy it. Find a title company in the area and pay them to run a title search. If you tell them you need it quick, that should be just a few days. That will tell you definitively who owns it. I think you will find one of three cases:
1) The deceased person still owns it. In this case it still needs to go through probate and get transfered to someone else. Perhaps you can contact the executor of the will (that lawyer you've been in contact with, perhaps) and buy it directly from the estate and let the executor divide up the cash. I'm pretty sure the heirs are going to need to OK that transaction, but its sounds do-able.
2) The property has been transferred to the heirs. Contact the heirs and make an offer.

In either of these cases, you're going to just write an offer, either to the estate or the heirs, and take that to the title company. The title company will try to short out who's owed what, and will request payoff statements from all the lienholders. If you're determined to buy this house, you need to make your offer high enough to cover all the costs (including the ones normally paid by sellers) and to make all the lienholders whole.

3) The thrid possibility is that its been foreclosed. Doesn't matter if a lis pendens or notice of default has been filed. It only matters if its been foreclosed. If the process is in progress, its one of the situations above. If its been foreclosed, some bank or investor owns it. The title search should tell you who, although that may be a long way from having a contact and a phone number. But at least its a starting point. If it is a REO, the most likely outcome is that you will just have to wait until its listed. But if you can find who owns it, and wade through their bureaucracy, you might find a contact. Unlikely they will actually sell it to you, but they might tell you the agent they will use to list it. Then you can contact that agent and tell them you will pay any price they ask.

I would make other living arrangements so you're not on the street on 9/15.