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Home Foreclosure Question?

My parents home was just recently foreclosed upon. Unfortunately, they did not tell my spouse and I about it until the foreclosure paperwork had been completed, so we were not able to buy the home or try to get them a different type of loan (they were on an ARM). Is there anything my spouse and I can do to get the house out of foreclosure or purchase it before the bank puts the house up for auction? Any suggestions, even if they do not directly answer my question, would be greatly appreciate. I can use any suggestions!

Public Comments

1. i'm sorry about your parents dilema, i would contact the bank or lending institution that holds the deed, perhaps they are willing to work with you, their only other option is to put it on the selling block, and with the housing market being what it is they may favor working with you, i wish you luck.


2. In most cases, those that have been foreclosed on have the right of redemption. There are two forms of redemption: equitable (after the default date but before the foreclosure sale) and statuatory (in the 10 days after the foreclosure sale). For an equitable redemption, they would pay the total amount due plus and costs that the lender incurred in foreclosing in order to regain their property. In a statuatory redemption, it is a little more complicated as they would have to go through the upset period to try to regain their own property. The best thing you can do is contact a real estate attorney in your area that knows the laws in your state.

   EDIT: This is addressed toward cnichol_t's point #3. When you file bankrupcy, it can not include your mortgage and will not prevent the home from being foreclosed, only stall it. Contact a lawyer before you do anything along those lines.



3. The bank is required by law to allow the owner to work out terms with them up until the minute of the auction. So if it is before the auction, and your parents will accept your help, then it is not too late. Have them call the mortgage company and see what you can do.


4. Every real estate question has "it depends" as its answer. You can do what is legal in your state, so as an active investor who focuses on foreclosure I'll give my broad stoke opinion. The specifics will vary based upon what is legal and customary in your location.

   Option 1): redeem the home by paying the lender what is owed to bring the loan current. Then monthly payments would resume at the new adjusted rate of the ARM. With the loans current, and assuming there is clean title; your parents are free to continue making payments or sell the home to you and your spouse.

   Option 2): you could short sale the home. you could negotiate with the lender and puchase the home from the lender for less than what is currently owed on the home. You are asking the lender to accept a lesser payment as if it was payment in full. Should you choose this route, be sure to understand the legal/tax implications it may cause for your parents by seeking knowledgable and appropriate counsel.

   Option 3): Just so you know: I don't recommend this but it is an option; depending on your parents financial situation...filing bankruptcy may be a viable option. I caution this suggestion and it should only be explored with sound legal counsel.

   Option 4): There are new loan programs offered by competent mortgage brokers for individuals who were current with their payments until the ARM adjusted. Very new program...not every brokerage is offering this. But it is out there and works well for those who qualify.

   more options available but this should give a good start. email me directly if you have more questions.



5. Your parents should have been served paperwork from the foreclosure attorney representing the lender. Have your parents contact the foreclosure attorney and order a payoff. The payoff will include the amount owed, attorney fee, all back fees. Once you get that number you will need to call a title company tell them you need them to run a title search and find out if there are any other liens on the home. Also, make sure you buy title insurance. But the short answer is "yes" your parents can buy or sell the home all the way up until the foreclosure sale day.


6. You may contact the Bank and seek an option. Banks do not welcome foreclosure anyhow. It is more work and headache for them. I suggest you call the Bank right away and try to make a deal with them directly.


7. You can actually talk to the bank directly with their loss mitigation dept. You can buy a Florida 'foreclosed' home up until the auction sale. Make an offfer on the low ball end and start negotiating from there. If you need to know how the foreclosure process works as well as the auction, make sure you check out a book so you don't make a mistake. Recommended reading: Complete Guide to Real Estate Tax Liens and Foreclosure Deeds: Learn in 7 Days [ISBN 0978834682] by Don Sausa.