Taking over payments on a pre-forclosure-too good to be true?http://saginaw.craigslist.org/apa/7...

Question

A lot of discussion on this topic. I am looking for a home to live in, not invest in. Was referred to this as I don't need 10% or 20% as a down payment. Was told all I need to have ready was the 1st month's mortgage payment after the title cleared. Any thoughts that haven't already been addressed?

Answer 1

your link doesn't work....can't see to answer

Answer 2

Taking over payments IS NOT permitted by ANY bank in the USA on mortgage loans.  This practice has stopped.

Period.

The only exceptions are FHA and VA loans and you go directly through the entire loan verification process just like you were purchasing a home, and you do this directly through the bank that already holds the note.

What you saw on Craig's list is one of the biggest scams going in Real Estate right now.

Answer 3

IT's a scam. You give them some money and a few days later the sheriff escorts you out.  The foreclosure wiped out your deed.  The bank owns the property.  If the house is in pre-foreclosure, there are already 7 payments missing.  You should not accept ownership unless you have a letter from the bank that the payments are PAID.... not "forgiven".  paid in full.  Of course, that won't happen.  Wait and buy the house in 2 months from the bank.  The price will be $50,000 less. /

Answer 4

The loan would have to be an assumable loan to be able to take over the payments.  FHA is one of the few loans types that allows this.  You do need to be approved by lender to assume a mortgage.  However, if the borrower is in default, then the lender wants to get that borrower off the loan. It is in your interest to get the current borrower off the loan, if they are having problems.  That is because the current borrower stay s on the loan, if assumed, and you are just added as another debtor.

Thus, it would be more accurate to say that the selling price is only mortgage debt payoff, plus outstanding property taxes. It is possible that the debt payoff is higher than current property value, since property values have dropped in many areas.  Thus. a debt payoff may be a bad deal.