Subject To And Foreclosures
I have a few people on the line who have just been issued NOD's.
I've heard of a few people purchasing this way, helping the seller get out and then hoping to flip the property, but then the bank forecloses on the new owner or calls the loan due anyway.
My question is this: While I am dealing with the lender and trying to get them to keep the loan in place, is there anything I can do to prevent that DOS or transferral of foreclosure?
Thanks.
Beacon
The best way to keep the loan in place is to simply reinstate it. California law requires lender to allow reinstatement up to five(5) days before the auction. If your people have just been issued the NOD, then you still have like 3 months.
Get an equity purchase agreement signed between you and owner. Wait the five(5) day cooling off period. Then get the deed and reinstate the foreclosing loan with a certified check. Then make the monthly payment yourself while you rehab then resell for a profit. The lender doesn't need to know anything except that it is performing because you're sending in those checks like clockwork.
Don't spend a lot of time stressing about the due on sale clause. To make things a little more covert you can use a title holding trust (land trust), but that does add another layer of complexity to your deal.
If you're just getting started with foreclosures in California, you need to aquaint yourself with a few laws. The most important for preforeclosure buying is Section 1695:
http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=86050110719+0+0+0&WAISaction=retrieve
I'm not sure what you mean by "transferral of foreclosure".
thanks, that was what I was assuming to be the best way.
I've read through the codes and they seem pretty straight forward.
There are alot of homes here in Socal that don't need too much rehab. They're pretty nice places. With the market so crazy lately, owners have been getting over their heads with loans that are too high for them to handle.
Thanks,
beacon
How are you checking if the forclosed property has existing liens against it.