Tips for buying from homeowners with missed mortgage payments

[Matt Rogers]

I am looking at buying a house in the San Diego area and the current home owner has a year of missed payments on her mortgage. What responsibilities should I expect to fall on to me if I were to purchase the property? What techniques can I use to find out more about what she may owe and who may have rights to the property already? I just don't want to be blindsided. Any information would be appreciated.

[Nicholas Covington]

@Matt Rogers

She has a total of a year of missed payments, or she hasn't been making payment for the last year? If the home is in pre-forclosure than she might not have the right to even sell the property. I was in process to purchase a home from a seller that failed to disclose that she had not been making payments. Turns out 2 days before my closing that it finally came to light through title search. The seller was not allowed to sell the house unless she brought her mortgage to current. She was to bring 10k to the table in order to have rights to sell the home.

Normally it's the title search that finds things like this, but normally it's done too late in the process to really make a difference in my opinion. Had it been the first thing to look at, I would have saved 45 days of my time and the money spent on inspections and appraisal. The seller should know if they have started the foreclosure process as it's required by law to let them know. If somehow everything works in your favor and you are still worried, I would go ahead and have the seller pay for an owner's title policy to protect your equity.