???HELP…I live in the Chicago area and I have a unique opportunity to help someone out of pre-foreclosure. The house is scheduled to be sold at the court house in about a week. I have the means to purchase this property. My question is: after I have the purchase contract, do I contact the Lender after having the seller sign a release of information, and get a payoff amount and wire the funds directly to the lender? Or should I get in contact with the attorney filing the foreclosure paperwork and work directly through them? I am new to this so I would like to know what the procedures are to close on this quickly. I don’t want to pay off the loan and find out that the property went to the auction anyway because the proper parties were not notified of the loan payoff and transfer of title. I would appreciate if for any gurus out there to share their knowledge with me. Thanks
Not legal advice, but why not attend the court house sale and buy the property there?
You may end up getting a much better price than just paying it off directly. Just a thought.
Contact the lender for payoff?
I would suggest getting the Authorization letter from the seller to contact the bank on their behalf and find out what is going on. But yes, contact the lender ASAP.
Do you even know how much is owed on this property?
The attorney should be able to help you get payoff and get funds to lender to pay off property. Have you done a title search? Be careful you’re paying off all liens as you will only be getting a quit claim deed and no proof that the property is free and clear.
I have done a title searh and the title has only one mortgage on the property.
I plan on being at the sale at the court house to bid on this property. I have
gone to the court house in the past to bid on properties but have been out bid by other investors. I would like to eliminate this competition by acquiring the property before the sheriff’s sale. Currently the home owner has not
replied to any of my attemps to contact them. From talking with other investors, people in foreclosure can wait until the day before deciding to sale the property. If this scenario were to take place, I want to be able to move with decisive action in order to close on this property.
Being so close to the sale date and having an unresponsive seller is a bad combination.
If the seller is not responsive then you have no way to get their permission to speak with bank
about their loan. Go to the sale, do your due dilligence and bid on the property if it seems profitable
to you. What do the numbers look like???
update… I ended up going to the Sherrif sale and won the auction. I ended up paying more at the auction than the original judgement amount because there were a lot of people interested in the property. There is still a lot of equity in the property so I still made out ok
Now that I have this property. Do you think that it would be a good idea to get title insurance even though I am getting a sheriff’s deed? What would be the benefit to getting title insurance?
Did you do your own title search? Or did you hire a company to do it?
Along those same lines; if someone does their own how thorough is it?
I did my own title search then I hired a title search company to do a standard title search. The results match mine exactly. The report came back with only one mortgage on the property. There were no other type of liens attached the property.
Another quick question regarding insurance. The cofirmation hearing will be at the end of the week. Should I wait until the confirmation hearing before insuring the property or should I do it now? Note- I will not get a deed until the confirmation hearing. If the house had major damage to it between now and the hearing would the bank’snsurance cover the property and reimburse me for the auction?
As the old saying goes it’s better to have and not to need than to need and not have!
I would get the home insured as quickly as possible. But do make sure that if you are
paying for a signifigant number of months in advance that you can be fully refunded unused
premium without any penalty.Just in case if for some reason things don’t work out for
you with the acquisition of the home.
Update:
I take possession at the end of December by court order. Something interesting happened that I just found out about. The owners tried to take out a mortgage the day after the auction. I decided to do an online title search to see if my information had been posted in the recorder of deeds was when I discovered this. The day before I recorded the deed (got confirmation), was the day that a mortgage company recorded a new mortgage on the property. I called them to find out what the H… was going on and they told me that they had rescinded this mortgage because they found out about the foreclosure and also the property became mine at the day of the auction and the previous owner had no rights to encumber the property…
What If:
What if that 2nd loan actually went through before the sale date?
Are there lenders out there that would actually grant a 2nd even
with the 1st being in foreclosure? Not too likely…