Buying a Bank Owned Property... frustration

[forgeblast]

A buddy of mine wanted to buy his neighbors house, since it was right next to his farm and his son would be able to watch the farm. he called and called and then found out the bank sold the property to someone else, he was able to track down the "someone else" and was able to buy it. the property someone else bought for 12k my friend paid 18k, 2 days after the other person bought it. There are a lot of shady things out there.

 

[dmccarty]

Long story short. I hope.

We knew of a house that was 75-80% built and and behind on payments. It was very likely that the house would get foreclosed.

We talked to at least two lawyers about buying the house. Our options were to buy before the house went to the court house or wait until foreclosure.

Because the house was not finished the house could/should have mechanics liens which, if we bought before foreclosure, we would/could be liable. After foreclosure it would not be our problem.

There is MUCH more to the story but that is the gist of it. In the end we walked away from a variety of reasons. Which I think was the right decision. On the other hand, someone else bought that house and are the nearest people to our house. They have ticked off everyone in the neighborhood.....

Later,
Dan

 

[middleaged]

Mortgage foreclosure insurance ... it has to go thru the process so the lender can collect on the insurance to recap the loss and then they can sell it.... thats what I have been told.

I recently did a real estate auction for the lender ... they needed $250K the last bid was $227K they declined paid my fee's and expenses ... then I was told the foregoing by the lenders rep. It appears to be a win win for the lender.

This is absolutely correct. Most residential mortgages are secured by GSE's such as Fannie Mae, Freddie Mac, VA, USDA, or FHA. Let's say a homeowner gets a mortgage for $100K on a $125K property, value drops to $80 and owner walks for whatever reason, bank forecloses, and buy it at sheriff auction for $50. They are in the hole for $100K (what was owed), not what they spent at the sheriff sale. In order to receive the $100K from one of the GSE's, they have to market it according to the terms of the GSE. Fannie is different than Freddie, VA is different than USDA, etc.

I guess the point I am trying to make is that is isn't necessarily the banks fault. It's also not the banks fault the property is in foreclosure. I cringe when I hear that a homeowner gives a property back to a bank. The homeowners don't "give it back" to the bank, they give it to them instead of paying back the money the bank gave them to start with.

I do not own or operate a bank...I do work wth foreclosure properties, both for banks and for property owners.

 

[clemsonfor]

We had a bit of a problem with wells, they were worried that the value of the property would be tied up in the land since its 20 acres, big pain dealing with them.

You need to finance lang through farm bureau or agsouth or someone. Yea they are higher sometimes but i have heard they do land deals easy.

 

[Soundguy]

I hea rya.

The first house I built is now vacant. i sold it? in 99 or so to a guy I worked with.. he left work a few years later, along the way I heard that in the beginning og 11 he moved out and turned the house over to the bank ( chase ). I figured it might be kinda neat owning my old house again.. sent a letter to chase about it. neary a reply.. and runaround from phone calls.

banks DO NOT want to sell properties apparrently..

i have -0- sympathy for any bank problems i hear about.. failing banks or whatever. they are doing it to themselves with pirate like tactics trying to manipulate the market.. etc. no sympathy whatsoever for them...

soundguy

My neighbor gave his home back to the bank... prices are down about 65%... ethics aside... he was paying almost 10k per month... his loan $9000 + taxes of $1500 + another $300 for insurance...

Got to thinking I should look into making an offer because the land adjoins my land on one side and my parents on the other...

Spoke with the agent handling the property for the bank... they will not except offers till the property is vacant... could be another year due to California Laws and delay tactics... then the bank needs to inspect and the property has to be marketed to owner occupied buyers only...

Each buyer must be pre-qualified with Wells Fargo in order to make an offer... the buyer doesn't have to use Wells Fargo... they must go through the application process...

I told the agent I would be willing to make an all cash offer as-is with one condition... I pay for a survey so I know the exact boundaries... there are or have been encroachment issues...

I'm thinking Banks are really not interested in selling property/closing the books... if they were... why would they require a cash offer to go through loan approval???

The former owner and current occupant has lived their almost 30 months since they stopped paying the mortgage... he had several long drawn out loan mod negotiations where he had to be so many months behind before they could initiate the process...

 

[ultrarunner]

I guess the point I am trying to make is that is isn't necessarily the banks fault. It's also not the banks fault the property is in foreclosure. I cringe when I hear that a homeowner gives a property back to a bank. The homeowners don't "give it back" to the bank, they give it to them instead of paying back the money the bank gave them to start with.

I do not own or operate a bank...I do work with foreclosure properties, both for banks and for property owners.

In California... the only recourse on a purchase money first mortgage on an owner occupied home is the property... the only downside to the buyer is trashed credit...

A lot of folks would literally mail the keys to bank and move out... in other words walk away.

The last year or so... owners are using the legal system to delay pocession and cash for keys is very prevelent...

Also... some lenders pubically do not want a vacant home... way to many copper thefts and vandelism...plus code complicance used to give banks a pass... now they are holding the owner... now the banks responsible for blight, illegal activity and tacking on very high penalties if not quickly remedied... or having the work down and adding a municipal lean to the property...

 

[schoolsout]

banks DO NOT want to sell properties apparrently..


soundguy

If they sold those houses they had on their books, their "mark to fantasy" accounting gimmicks would be kaput. It's a shell game...it is why there are so many foreclosed homes still hidden from the market. They are hoping and praying that the Fed and Government can rob the taxpayers some more to help boost asset prices...

 

[Barnone]

Banks are only interested in one thing... money.

Duh, that is what they are suppose to do.

 

[schoolsout]

Duh, that is what they are suppose to do.

Some do God's work, too... :laughing:

 

[murphy1244]

This is absolutely correct. Most residential mortgages are secured by GSE's such as Fannie Mae, Freddie Mac, VA, USDA, or FHA. Let's say a homeowner gets a mortgage for $100K on a $125K property, value drops to $80 and owner walks for whatever reason, bank forecloses, and buy it at sheriff auction for $50. They are in the hole for $100K (what was owed), not what they spent at the sheriff sale. In order to receive the $100K from one of the GSE's, they have to market it according to the terms of the GSE. Fannie is different than Freddie, VA is different than USDA, etc.

I guess the point I am trying to make is that is isn't necessarily the banks fault. It's also not the banks fault the property is in foreclosure. I cringe when I hear that a homeowner gives a property back to a bank. The homeowners don't "give it back" to the bank, they give it to them instead of paying back the money the bank gave them to start with.

I do not own or operate a bank...I do work wth foreclosure properties, both for banks and for property owners.

Once you buy from a sheriffs sale all other claims are noll and void. I bought my house from one last year. Would not do it again for we were truly blessed and lucky to get what we did when we did.

 

[MasseyWV]

Duh, that is what they are suppose to do.

Duh! Not according to the fancy advertisements many of them air. In any case, my comment was said partly in jest.

 

[chucko]

I bought one owned by Wells Fargo They do require it even with cash it is more to make sure they are not giving time to someone else that can't afford it. So of the people they have handling this can be asses I suggest you have your Realtor deal with them but remember they all get paid commission based on what you pay so start a lot lower than you are willing to pay..
Worked out well for my my house was worth 350k 4-5 years ago I got it last year for 120k

I started with a 50k offer. before I was done I was mad at everyone

 

[ultrarunner]

It's a shell game...it is why there are so many foreclosed homes still hidden from the market. They are hoping and praying that the Fed and Government can rob the taxpayers some more to help boost asset prices...

Only anecdotal...

In the last 2 weeks, I have met 5 individuals that live in homes now owned by the bank...

The reasons vary in details... most have given up trying to hold on even if they still have income.

I hear all the news stories on how things are looking better... just not seeing it where the rubber meets the road.

 

[schoolsout]

Only anecdotal...

In the last 2 weeks, I have met 5 individuals that live in homes now owned by the bank...

The reasons vary in details... most have given up trying to hold on even if they still have income.

I hear all the news stories on how things are looking better... just not seeing it where the rubber meets the road.

If the banks foreclose, they really don't want to have to sit on property that is vacant where it rots away (humidity, etc) and typically dump them at what seem good prices. Problem is, when they do this, those assets they hold on their balance sheets can not be fudged any longer. It has now been marked to actual market value and not what they "think/believe" it is worth. This would decimate them. They don't like dealing with reality as, truthfully, many banks are insolvent.

News outlets are typically corporate-owned and they, along with the financial sector, have huge influence over the gov't. Gov't bails them out...they help spread the propaganda.

Sounds crude and "unthinkable," but, uh, what else can be said?

 

[ultrarunner]

Problem is, when they do this, those assets they hold on their balance sheets can not be fudged any longer. It has now been marked to actual market value and not what they "think/believe" it is worth. This would decimate them. They don't like dealing with reality as, truthfully, many banks are insolvent.

A typical foreclosed home here is 50% or what is owed... I've seen some go for 20% too...

Nothing wrong with them... actually, most have had upgrades done so they are better than when the bank lent the money in 2006-07.

Vacant homes are big magnets for trouble makers... chances are a residential structure fires are often vacant home with squatters... some get destroyed just for fun.

In some ways... the banks are very much part of the problem and I don't mean for making the loans...

Running fast and loose with the paperwork and certifying all was in order to take short cuts has cost them dearly and for that, they have no one to blame but themselves..

Foreclosures are nothing new... they have always existed just like tax sales...

 

[2manyrocks]

My Father passed several years ago, but at one point while the economy was still going strong, he told me that the banks had so many foreclosures in the Great Depression that the people just stayed in their homes because the banks didn't want so many vacant properties.

He also said that many generations of the same family used to live in the same home, and then only a few rooms were heated in the winter.

I used to wonder how so many people could afford such large homes. Now I guess they couldn't afford them after all.

My question is where all the money came from to lend them? Our local rural newspaper has foreclosure ads every week from out of state lenders I've never heard of. It's not the local banks that have the bad loans for the most part. It's lenders I've never heard of.

 

[hawkeye08]

I think this new government program that "adjusts" the principle down due to the value of the home declining should also have a provision to increase the principle if the value of the home goes up.

Ultra, hoping it works out for you if you still want to purchase the property.

 

[chucko]

"It's not the local banks that have the bad loans for the most part. It's lenders I've never heard of."

That does not mean the local back did not give the load. Banks trade loans like stocks

 

[2manyrocks]

It's possible that the local banks sold some of these loans in the secondary market. It could also be that many of them came through independent mortgage brokers competing with the local banks.

 

[riptides]

Ugh... another horrible bank posting.

Dude! I feel for you.

I still have a few teeth left from my refi. If you know what I mean. I still cannot figure out what the right thing to do was..... I think maybe the chickens, candles and full moon got Wells Fargo on my side. I just cannot understand the banking system these days.