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Updated 6 months ago,
Want to buy a SFR in pre-foreclosure and want to make sure I don't get burned
I have only bought 2 ways- MLS and through wholesalers so this is my first experience with pre-foreclosure. I want to be sure I will get full clear title (ownership) of the house and not get burned by an outstanding lien or something. I also want to do right by the seller.
My realtor introduced me to one of her former clients who needs to sell his house. His story is long and complicated but the gist of it is:
He bought the house somewhat distressed in 2019 (through our mutual realtor). He did a re-fi a bit later and the lender botched the paperwork. He thinks that means he doesn't have to pay the lender and has not been paying. Lender thinks otherwise of course and has initiated foreclosure. I ran an O&E and I got:
- "notice of election and demand for sale by public trustee" this is for about 350k and I assume is the lender whom he didn't pay
- "MERS assignment of deed of trust" I'm not sure what this is but I think it's related to a quit claim deed where he added his wife to the deed thinking it would shield him from foreclosure.
-"notice of assessment lien" I think this is for not paying the HOA (He claims he did pay the HOA) about 3k
-"transcript of judgement" It looks like he owes a credit union 16k
For what it is worth, he has hired a lawyer to try to get out of his debts.
Are the following assumptions correct?
-If I buy using a title company, the title company will make sure I get all debts and liens payed off and I should have no problems getting the house free and clear.
-Seller will pocket my offer minus what he owes the 3 parties listed above. (no other penalties or anything else I'm missing)
Anything else I should be wary of? Any other advice?
THANKS!!