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tazgem · Joined: 20 Nov 2009 Posts: 1 1.40 Dollars($)

Hello,

We are trying to find a lender for a conventional mortgage on a forclosure we want to bid on. Problem is the home has some missing tiles in 2 of the rooms in the house exposing the bare concrete slab the home is built on. We do NOT want an FHA or 203K as we've been told these will cost us additional escrow/repair moneys to the tune of $6,000 over the life of the loan.

So the question is, how do we find a loan company who will work with us on either doing the repair/painting or carpet pre-closing ourselves or knows if the house will pass inspection as is?

Thanks

sonjakracine · Joined: 24 Oct 2007 Posts: 77 15.05 Dollars($)

It is a vicious circle, the home needs repairs but you can't do it until you close, but you can't close because you need repairs. Madness, I know.

Here is how I see it.
The house may or may not pass inspection depending on what appraiser says and what underwriter sees. With that being said you can repair the home prior to closing BUT you need the owning bank's permission to do so. Most likely you will not get this to happen. Simply put they cannot be held liable for you to go into a home, do repairs, not get hurt, etc. Also if financing were to fall through, then what, do you make an agreement to get your repair $ back or are you out the money?

FHA should not care what the floor looks like and where did this magical $6000 figure come from? Escrows are taxes and insurance, are you talking about mortgage insurance maybe? If you would put down less than 20% you will pay MI no matter what. 203K is based on purchase price plus repairs and standard fees. Are you keeping the loan for 30 years? In my experience most people only keep their mortgages for 5-7 years at best. Simply put $6000 over life of loan, divide by 30 years =$200 per yr or $16 per month…..is the home worth an extra $16 per month??

raymond · Posted: Fri Nov 20, 2009 1:46 pm Post subject:

>>We do NOT want an FHA or 203K as we've been told these will cost us additional escrow/repair moneys to the tune of $6,000 over the life of the loan.

The 203k is the only solution offered for your scenario. How much money are you saving by buying the foreclosure? Subtract $6,000 from that and decide it you're okay with it. Chances are you're still going to get a great deal. $6,000 during the life of a 30 year loan is only 55 cents a day. Are you willing to lose a home you really like, in exchange for saving 55 cents a day?

Posted: Sun Nov 22, 2009 8:38 am Post subject:

Buying at foreclosure sale has great upside potential BUT has various problems especially if you don’t have the money in the bank and/or ability to immediately borrow on an unsecured basis. Then there is the timing issue. Most court systems assign a very low priority. Forget “justice delayed, justice denied”. In fairness the courts have high volume but the personnel do have a really bad attitude. What this means to the “winning bidder” is that likely you will not see a deed into your name for 1 or 2 months. This makes it hard to time financing since the mortgage cannot be filed until after the deed is prepared and recorded in your name. Nice limbo period and you’d be the one suffering.

The “some tiles” could likely become an issue if you’re in a “point of sale” community or there is a required certificate of occupancy. Unknowns could mean “money pit”.

Suggest you contact “the lender” – the one foreclosing to determine to whom the property will be transferred if the lender/servicer is the successful bigger. If the bid will be assigned to Fannie or Freddie the court sponsored delay indicated above should be considered a walk in the park. If you’re lucky enough to have the lender take the property back directly (mortgage put into the secondary market with “credit enhancement” in LO speak), you may be able to do some preplanning with lender based on the most probable outcome – lender buy the property at foreclosure sale. An interest potential buyer is always welcome for “not yet” but “likely incoming” REOs. Lender doesn’t pay a Realtor commission and you could get a good price and flexible fix up time.

snvservices · Joined: 20 Nov 2009 Posts: 17 3.29 Dollars($)

Hi,

This is giving me a very nice brief and this will soon work the best to me as, this is what I am want to know about and as, I am lloking for this and this is facilitating me alot.

Thanks!

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