How to purchase a Preforeclosure - Posted by Cindy Sekiguchi

import · July 15, 2003, 1:31pm

Posted by js-Indianapolis on July 16, 2003 at 13:49:25:

OK, so a pre-foreclosure is after the NOD, and before the sale; and after the sale either the bank takes it back and it becomes an REO, or an investor buys it, thus curing the “pre-foreclosure”, then when is a property ever a foreclosure? Just for that very split second they say “SOLD”?

I’m thinking the only moment it could be called a foreclosure is in between the SO and LD.

import · July 15, 2003, 1:31pm

How to purchase a Preforeclosure - Posted by Cindy Sekiguchi

Posted by Cindy Sekiguchi on July 15, 2003 at 13:31:43:

Thursday I will be meeting with a woman regarding purchasing her preforeclosure home. I am familiar with Lease/Options but do not understand how they would apply to a preforeclosure. Subject To makes sense, but I am not sure how to go about it. Any suggestions?

Thank you for your reply.

Cindy Sekiguchi
cindy@foreclosureoregon.com

import · July 16, 2003, 6:50am

Re: How to purchase a Preforeclosure - Posted by Mich_Mike

Posted by Mich_Mike on July 16, 2003 at 06:50:48:

Cindy,
Buying a pre-foreclosure sub2 would involve the following:

Find out how much $ is necessary to bring the loan current (Verify this, don’t take their word for it)
If it doesn’t kill the deal, ask the homeowner if they would be willing to sell the house for what is owed on it.
If yes, Deed the house into a Land Trust (doing all of the required land trust steps)
Get a specific POA for the property signed
Get an “Authorization to Release Info” signed
Find a T/B who will bring enough funds as option consideration to make up the back payments
Collect payments and retire rich

I hope this helps. This is a skeleton and not meant to be a template. Please use the archives and/or a RE course to guide you through.

Good Luck!
Mike

import · July 15, 2003, 3:03pm

Re: How to purchase a Preforeclosure - Posted by Rob FL

Posted by Rob FL on July 15, 2003 at 15:03:28:

Pretend it’s not in foreclosure.

Now, write a contract on the house just like you would any other house.

import · July 15, 2003, 3:25pm

Hold on… - Posted by Brian (NoCA)

Posted by Brian (NoCA) on July 15, 2003 at 15:25:53:

Be sure to check your local laws. Your email address indicates that your are in Oregon. Here in CA, there are very strict laws related to dealing with a property in foreclosure. Do not simply “pretend it’s not in foreclosure”. You may need a completely seperate contract with specific wording. Check with your local association of realtors regarding purchase contracts for properties in foreclosure.

Regards,
Brian (NoCA)

import · July 16, 2003, 9:00am

Re: Hold on… - Posted by Rob FL

Posted by Rob FL on July 16, 2003 at 09:00:31:

I know California has lots of interesting laws that don’t apply to the other 49 states. It appears she is in Oregon.

I take it from her original post that she thinks something is magical about the transaction because of the foreclosure. Nothing is magical. But the seller may be more motivated and have less time to act. Other than that, there is no difference unless she wants to do a short sale, loan money, or something creative around the foreclosure. Other than that, a house is a house is a house.

Of course, now I will say to check your state laws.

import · July 15, 2003, 6:36pm

CA foreclosure purchases… - Posted by Bryan-SactoCA

Posted by Bryan-SactoCA on July 15, 2003 at 18:36:27:

I’ve always been aware that buying a home in foreclosure in CA requires a specific contract, but I’ve never been able to find a copy. Do you know where I can get one?

import · July 15, 2003, 8:41pm

Re: CA foreclosure purchases… - Posted by Brian (NoCA)

Posted by Brian (NoCA) on July 15, 2003 at 20:41:56:

Bryan,

I’ll email you a generic contract. If you are interested in persuing pre-foreclosures you should read and understand CA civil code section 1695. I’ve provided a link below. This outlines how to structure a contract and what needs to be included. 1695 was brought about as a result of homeowners in foreclosure being taken advantage of by investors. An investor is asking for BIG trouble if your purchase agreement doesn’t follow these guidelines.

http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=3191271642+0+0+0&WAISaction=retrieve

As always you should have an attorney review any documents you plan to use.

Best of luck,
Brian

import · July 15, 2003, 9:13pm

Re: CA foreclosure purchases… - Posted by Roy(NC)

Posted by Roy(NC) on July 15, 2003 at 21:13:39:

But Rob is correct!! This is PRE- forclosure, which in NC means before foreclosure: the owner is in trouble but the bank has not started foreclosure. We have bought several this way and it is a great time to buy. Nothing out of the ordinary is necessary in the contract.

import · July 16, 2003, 10:22am

Re: Clarification… - Posted by Brian (NoCA)

Posted by Brian (NoCA) on July 16, 2003 at 10:22:18:

In these parts, “pre-foreclosure” usually refers to after the notice of default has been filed but before the trustees sale. Oregon has both mortgages and trust deeds, but I believe trust deeds are prevalent. Therefore if a NOD has yet to be recorded, then proceed as usual. Actually, I would proceed quickly because once anything is recorded, everyone and their mother will be after the same deal.

Regards,
Brian