Who Can Buy Our Home When they Auction It??

[MRC123]

We were thinking my Mother-in-law could purchase our home when they auction it off. Are there any law or rules against this??

We live in AZ.

Thanks

[Moe Bedard]

be careful with that if she has to get a loan on the property........

If she were paying cash for the property that would be different ........... but the sale with a loan would be considered a foreclosure bail out and a non arms length transaction. There are not many lenders that will fund a transaction like this. A non arms length transaction is among related parties.......related persons include individuals connected by blood relationship, marriage, or adoption (legal or in fact).
And when the question would arise............Is this transaction among related parties on her loan application and at the closing.....if she were to answer no.....the possibility is always there for an SAR (Suspicious Activities Report) to be pulled on the new loan file at any time.............

It is very sticky territory.......

If it is for you.............do you know anyone that is not related to you that could purchase the home?

[MRC123]

This wouldn't be a short sale, she would actually be buying it from the bank, because they would have already foreclosed on us. Would it still be the case as you stated above?

[Moe Bedard]

yes..........it has to do with the chain of title...............when it goes to foreclosure auction.........your mortgage liens are still on the property until it is sold at auction................if she were to purchase it at the auction that would be a foreclosure bailout.........because she is buying it at the sale and you are still on title to the home at that time.

If you meant that she was going to buy it when it became an REO property after the auction is over and the bank owns it and then resells it..........that is a very different story...........that she can do.........but it takes a while for a bank owned property to come back on the market.........