All Forum Posts by: Nathan Hansen

All,

Apologies if this question has been asked and answered before. I tried to look through the messages and could not find what I was looking for. Your help is truly appreciated.

I am trying to buy a property at a foreclosure auction. The property is in a fairly good condition and the auction price is likely to start well below the Fair Market Value (No minimum bid published but the outstanding loan which is upwards of 200k is nearly 150k less than FMV). The owner seems to have abandoned the property - not clear why. Bank is foreclosing and bringing it up for auction next month. I have checked for title liens, HOA liens, Property tax liens, outstanding utility bills etc, and everything seems to be in the clear.

The county where it is being auctioned allows only cash/cashier's checks at auctions. I have savings to cover the bid at the auction in cash. But I would like to get regular financing via mortgage for the home post-auction (if everything goes well and I get the home at auction).

The mortgage lender I have worked with in the past claims that once I buy the home at auction, I am no longer eligible for regular mortgage financing. I will be eligible only for Home Equity Loans (at higher rates of interest). The reasoning is that mortgage is given only when I am purchasing a home from somebody else, and I cannot sell the home to myself. Is this a true statement?

One other possibility that has been suggested is that I open an LLC, and purchase at auction with title to the LLC. I can buy the property from LLC, and get mortgage financing in the process. Is this possible? My FICO is excellent and I have pre-approvals for amounts upto 450k.

As you may have inferred, this is my first attempt at auctions and REOs. I feel that my situation is not uncommon. What do other investors do for financing auction properties?

thanks,
- Nathan in Texas

I need advice on a property that is up for sale that I am interested in. It is listed by a local reality. It is listed at 400k. At least from the listing info, I could not tell right away that this is bank-owned.

However, when I checked both the central appraisal records and the county clerk public records, it appears that this property is currently owned by Wells Fargo, and under the name of some trustee. It appears that the last owner signed the Deed over to WF Bank sometime in Feb 2007, and the property appears to be on market since then for the 400k figure.

The county records also state that the mortgage loan on the house by the last owner was 260k, and the Deed was transferred to WF bank for the 260k figure.

My question is - what are the chances that if I make an offer for 260k the bank will accept? The house appears to be in great condition, and is well worth 260k. Since the property values are dropping, I am having a hard time with Fair Market Value figure for houses around.

Any advise on what would be a good approach is truly appreciated.

- nah