What Needs to be Met in a Foreclosure?

[Peter Pezzano]

I'm starting to target pre foreclosures. This is the example I would like to be made more clear:

I find a seller who has received a notice of taking, I make him an offer to sell to me and he agrees. How do I know how much back money is owed to the bank? If their are any liens against the property, am I responsible for settling them? Is there a certain amount that needs to be met in order for the seller to be able to sell? Say he owes the bank 200K, do we only have to meet the 200K to have the mortgage be satisfied? 

Any advice is much appreciated, thank you.

[Rick Pozos]

I always ask the seller for their most recent mortgage statement. That should show their unpaid principal balance. Add that to the payments in arrears or past due amount and you should have the total payoff. It will not be exact, but good enough for preliminary numbers. You will have to have a title search done to see if the seller has any liens, judgements or anything else on him or the property.

Once you are ready to move forward, you will have the seller ask the bank for a payoff amount and also a reinstatement amount. This will let you know exactly what is totally owed to the bank and what amount you can pay to catch up the payments if you are doing a sub-to.

You can also have the seller fill out a release of information authorization, send that to the bank and you can call the bank and ask them for the payoff and reinstatement amounts yourself.