Foreclosed homes with tenants still there?

Question

I did some searching for recent (past 2 weeks) foreclosures at my county's recorders office.  I just got back from checking out the properties and all but one still had tenants in them.

What does this mean exactly?

I'm looking for properties to wholesale but it seems to be that these recently foreclosed properties are technically off limits.

Could I still place on a bid on these homes?  Should I just wait a week or two and check them out again to see if the tenants have left?

Any advice would be appreciated.

Kenneth Stillwell · Answer

The banks cant release all of their inventory at once or the values will fall even further. In order to stabilize the market they only trickle them out a few at a time. That being said the worst thing that can happen to a house is abandonment.  People living in the house will at the very least keep it in livable condition. Banks are not filing Writ until the very last stages of the foreclosure or not at all before an auction sale.  We routinely have occupants in the houses when we purchase from the auctions. Cash for keys works better than filing writ also...

Andrew Jones · Answer

Not sure about your area, but in CA homeowners that get foreclosed on have a 90 day redemption period. So during those 90 days the bank just sits on the property.

Mikel Graham · Answer

It's hard to say Joel.  Based on the notices I looked at, all of them are bank owned and recently foreclosed.

Hmm, would you mind explaining why you feel this way?

Joel Owens · Answer

Foreclosure laws vary by state.

Are they a tenant with a lease in place where the owner was renting the property and it got foreclosed on or is it the owner was living there and was foreclosed on and now they are a tenant in sufferance??

Either way if the bank foreclosed and nobody bought it at the steps the bank took it back.

At this point the bank is most likely having a broker make contact with the holdover tenants whoever they are and ordering BPO's.Then the property  will be cleaned up once they evict or do a cash for keys  and listed for sale REO.

You can try to contact the bank directly.It will depend if this is a local,regional,national bank or an RMBS security.Also if it's part of a share loss agreement with the FDIC where another bank bought the note out.

I don't see a wholesale deal here or if there is the bank would want you to have skin in the game.