If a property is in pre-forclosure, and the owner of the property agrees to sell to you…must you get the approal of the lender to do so…before you get them under a contract?
You do not need lenders approval to buy the property and especially not to enter into a contract with the seller to buy it. In a subject to the loan purchase you do not even let the seller know that you are the new owner. What you may want to do is to get a letter from the sellers giving you permission to get information about their loan. You want to verify the loan balance and all the past due amounts that are due before you buy but not before you sign a contract.
newbie real estate investor question here. where do you go to find pre-foreclosures?
TO CODYAKINS… I GET A DETAILED LISTING FROM REALTYTRAC.COM, BUT IT WILL COST YOU ABOUT $40 A MONTH, OR JUST GO TO A COURTHOUSE, OR MAJOR LENDING COMPANIES
When it comes to buying pre-foreclosures, you mainly deal with the home owner. You have to get writen authorization from him/her in order to receive information from the bank in regards to their loan. In order to purchase the property you have a couple of options.
After obtaining the letter, you contact the bank to get accurate information on the amount due. This includes whats called the re-instatement figure. This is the amount of money needed just to bring the loan current. This must be paid in order to stop the foreclosure,but be sure to get a quit claim deed signed and dated from the owner before you re-instate the loan otherwise you’ll be running a great risk.
Then you can pay the mortgage on the property until you are in position to sell it or purchase it.
3.Other option is to purschase the property through hard money or convention financing using a NOD programs which funds reinstatement and purchase price provided the value is supported my an up to date appraisal.
Hope this helps
Jaz loan officer/ investor in training