Buying family property in foreclosure

Discussion in 'Investment Property Loans' started by dwaynet19, Mar 27, 2014.

  1. dwaynet19

    dwaynet19 LoanSafe Member

    So my brother is in foreclosure and received a letter stating his house is to be auctioned off come mid April.
    He owes about 170k. The house is worth about 220k. Keep your home CA submitted an offer to get him current with the lender. We are waiting to hear what the lender has to say.
    Question, Can I come in and buy the house as an investment property for the 170k owed?
    The lender keeps jerking his chain and does not want to negotiate cause theres a lot equity, is there any legal recourse he has?
    Does anyone know any real estate lawyers in the Patterson, ca area?
    Thanks in advance...
  2. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Welcome to the LS community Dwaynet19.

    Why would your brother risk losing his home to foreclosure and the $50K in equity? I would not waste any more time with the Keep Your Home Ca program as it generally only applies to underwater homes. There's really no legal recourse here, virtually all loan modification programs are designed for distressed borrowers with $0 equity and are unable to sell their home to avoid foreclosure.. Act fast and get pre-approved for a mortgage so you can purchase the property before it's sold at auction!

    Let us know if we can help, we typically issue pre-approval letters (if you qualify and after the initial prequalification) within 24-48 hours upon receiving your information. This is all you need to get the ball rolling.

    Good luck!
  3. bankwhipped

    bankwhipped LoanSafe Member

    you can buy the house before foreclosure from your brother for the balance of the loan as a regular sale and purchase, have a title co get the correct payoff amount and if you are willing to pay that the bank can't refuse. This will also keep your brother from having a foreclosure on his record and the equity will be kept in the family instead of the gangster banks.
  4. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Exactly bankwhipped, thanks for chiming in! Buy the property before it's sold at auction, loan modifications are extremely difficult to accomplish with equity in the property!
  5. LovingOcwen

    LovingOcwen LoanSafe Member

    I wouldn't tell the bank that is my brother, they might give you a hard time.
  6. Erik Sandstrom

    Erik Sandstrom Mortgage Expert - Call 1-619-379-8999 Staff Member

    You're exactly right, this would be considered an non-ARM's length transaction and I know I've run into this situation before and the borrower was unable to get financed because the property would have to be brought out of the foreclosure proceedings before it can be sold to another party. Ex: Borrower would have to pay all the past due, fee's & penalties. Then an non-ARM's length transaction might work but I'm going to do more research on this and let you know.
    Last edited: Oct 19, 2017 at 9:41 AM
  7. Erik Sandstrom

    Erik Sandstrom Mortgage Expert - Call 1-619-379-8999 Staff Member

    The reason we wouldn't be able to finance it while in foreclosure is because it's considered a "Bail Out" which we do not do. It's going to be extremely difficult unless the loan is brought out of foreclosure.
  8. LovingOcwen

    LovingOcwen LoanSafe Member

    The banks probably the family member would allow the person in foreclosure to stay there anyway.
  9. balbowhite

    balbowhite LoanSafe Member

    The best option is, you buy your home before foreclosure from brother, and otherwise the bank will be liable to take the mandatory actions.
    Last edited by a moderator: Jun 3, 2014
  10. Amy Knisely

    Amy Knisely LoanSafe Member

  11. carolineallison

    carolineallison LoanSafe Member

    Hi dwaynet19,
    Yes, it is a good idea to buy a property as an investment to stop foreclosure.

    Last edited by a moderator: Aug 24, 2017
  12. Erik Sandstrom

    Erik Sandstrom Mortgage Expert - Call 1-619-379-8999 Staff Member

    Once the foreclosure proceedings start which it looks like they have, it's going to be very difficult if not impossible to buy the property for what is currently owed on the property. Going back to my post above with it being a non-ARM's length transaction it would be considered a bailout loan which many institutions if not all will not do. Since this post is a bit older, I am very curious as to what the overall outcome was with this situation.

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