What does it mean when a home is a pre-foreclosure home?
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It means the owner hasnt made a payment for at least 3 months and the lender has filed a notice of default. Depending on the state this pre-foreclosure period can be usually 90 days before the sale is held. The sale itself is the act of foreclosing, the sale legally removes the defaulted party from title and either the best bidder or the lender will now take title. Be very careful in purchasing this property as the terms seem reflective of one of those scammers that often use them cheesy "we pay cash for houses" signs. Make sure you are buying the home from the owner directly and that the trustee and the lender have viewed your purchase agreement. Those scam artists that lure people in with terms that seem too good to be true should be taken out and hung. They will keep your money for 2-3 or more payments and someone new will come and evict you as they will have the real title to the property in hand. The no money down is a red flag also as the house is at least 3 payments in arrears plus trustees fees. Your $454.00 per month doesnt even cover trustees costs. One other issue is the low balance suggests that you are looking at a junior lien. Before getting in deep I would highly recommend looking at title and contacting the trustee. Most real estate agents wont know what to do or how to do what this case requires. Make sure if you do seek out an agent it is one that specializes in investment propertys.
The current mortgage on the home is assumeable. This means they can transfer the mortgage from the current borrower to a new borrower. The mortgage lender would rather do this because the cost is incredibly low compared to the cost of foreclosure.
Just make sure that you are also taking over the deed to the home. And will have to qualify for the loan per that lender's guidelines.
For face value it sounds like a good deal. just make sure you are dealing with a reputible mortgage co. My suggestion is to get a Realtor to work out all the details. If you have to pay a small fee to use them so what, you'll know your not getting hosed in the transaction.
Check this out:
http://www.realestatehow.com/lib/investi...
It is possible. Assuming these people do not want a foreclosure on their record they might be willing to sacrifice the equity they have built.
As far as just "taking over payments" I don't know how that works. You will probably have to buy the property and make it legit.
Act quick though the foreclosure process is fast.
Here's a good reference site:
http://www.foreclosure.com
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