Tips For Weathering The Foreclosure Freeze

As mentioned here earlier this week, the current foreclosure freezes by Bank of America and others have more than a few people in limbo as they wait to either buy or sell a foreclosed property. To help these folks out, Reuters has put together a list of helpful tips for weathering the freeze.

Among the bits of advice for those who are already in the process of purchasing a foreclosed property:
“Call the bank that owns the property and find out whether it has a clean title. Get a title search done. And do not even think about going to settlement without making sure that you are getting title insurance. If problems arise later, the title insurance company would most likely cover it.”

For those thinking of buying at a foreclosure auction, Reuters says to wait a bit:
“Don’t buy any real estate at auction right now… In the first place, you’ll have to pay cash, and it is unlikely to come back to you if problems arise. You can’t as easily ascertain whether the title is clean while you’re standing in front of the courthouse, either.”

And if you’ve just closed on a foreclosed property and are worried about losing your new home, they say that’s a “highly, highly unlikely scenario…. There aren’t very many precedents of foreclosures being overturned and it seems even less likely that a judge would throw out a homeowner who’s bought a property to put somebody back in who hadn’t been making payments anyway.”

For all the tips, check out the full article on Reuters.com

Comments

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  1. sonneillon says:

    As a property preservation agent. I wonder if this is going to mess me up. Maybe not Virginia allows non-judicial foreclosures.

  2. mcs328 says:

    Hmm…I just got an email from my agen that because of the foreclosure debacle, it’s an excellent time to sell my home since I’m not in foreclosure for top dollar. Potential buyers will have less supply of homes to choose from and I can name my price. Wow…what a way to capitalize.

    • Loias supports harsher punishments against corporations says:

      Actually, it sounds like a great idea.

    • Darkneuro says:

      Go, Free Market!
      I applaud their ingenuity. How many realtors are bemoaning the fact the market is so completely trashed and just whining?

    • coffeeculture says:

      It was an excellent time to sell your home at the peak (because it was the peak), it was an excellent time to sell your home when prices tanked (because crap! they’re getting lower!), it was an excellent time to sell your home when foreclosures flooded the market (because who wants to deal with short sales/foreclosure properties and the risk?).

      Basically, if you’re a real estate agent, it’s always a good time to buy/sell a home.

  3. Mike says:

    As someone who has been looking into investing in foreclosed properties there is one thing I have learned throughout this entire process: There are WAY too many people with their hands in the cookie jar in the home purchasing process. The quote from the article is a great example: “In the first place, you’ll have to pay cash, and it is unlikely to come back to you if problems arise.”

    Our system is seriously flawed if people with good money can’t buy these homes for fear of not being able to get it back when problems arise. Also, I have seen tons of banks keeping empty houses on the market for unrealistic prices. Sorry banks, but you are going to take some serious loses if you want to dig out of this hole. Also, I was going to buy a foreclosed condo for just under $100k, but the bank insisted I pay cash, they wouldn’t finance a property that cheap. Then I found a fourplex for a decent price and they insisted on 25% down. I have good credit and 20%, been approved by my bank for a loan, but nope, not good enough, they insisted I use their financing and play by their rules. Three months later the house is still on the market.

    I am actually sitting here with approval for a loan for an investment property, and I am struggling to give someone my money. It is unbelievable really. So basically I have given up on the foreclosed properties, which is a shame because there is no reason to let empty houses sit around.

  4. scoutiebear says:

    As a different perspective, I’m a single mom who lost her job, and has battled endless paperwork, useless bank representatives, and government agencies to try for a loan modification. We’re enrolled in the Obama HAMP plan, but haven’t heard. Anyway, Bof A has our loan-and now that they’re not foreclosing right now, it’s an early Christmas for us. We get to stay in our home for a bit longer-and the constant feeling of dread and fear is, for the moment, abated.
    I’ve read a lot of angry comments and heard a lot of angry people, blaming borrowers for the mess we’re in, and maybe they’re right. But the flip side is that I work 12 hour days now to make half of what I used to earn, and losing the only house my kids have ever known is a horrible thing. It’s going to be a happy Christmas after all.
    Thank you, Bof A.

  5. ParingKnife ("That's a kniwfe.") says:

    If problems arise later, the title insurance company would most likely cover it.

    >>Why I despise an distrust all insurance companies.