Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
This from CNN -- Forget it. You're not getting your house back -- sure doesn't make me feel warm and fuzzy about the prospect of buying a foreclosed property:If a court does rule a foreclosure invalid, either because the lender didn't have the paperwork in order or because the mortgage was not actually in default, a home's title will revert to the original owner, even if the property has since been purchased by a third party. ...But one thing is clear: If the original homeowner doesn't have the cash to catch up on the mortgage, the lender will restart the foreclosure process and, with the paperwork in order this time, repossess the house. ...The new owner should be able to stay in the house while the second foreclosure works through the courts because by this point, the original homeowner has probably found a new place to live. ...In the rare case that a foreclosure victim does want a house back after a third party has moved in, the new buyers will be compensated by title insurance.
newbie-It sounds like as long as you have good title insurance you are fine. It says most likely you will get to stay in the house, but even if the person being foreclosed has the money to get the house back title insurance will compensate you. Obviously that is not an ideal situation, but its risks like that which are why foreclosures are often better deals than regular sales.
How much of a risk is this in VA as compared to other states?
VA is not a judicial state, so courts aren't generally involved initially in foreclosures. But I also recently read about foreclosures being a hot trend for lawyers, so that suggests to me that even here in VA, you could wind up being involved in a foreclosure lawsuit.
Jeff-I would think that this will be slightly less of an issue in VA vs. other states. In general VA is investor friendly, so they would be more likely to help the investor/new owner than the previous. Although I don't think its a big risk to people buying foreclosures anywhere as long as they get title insurance.
I could share some very interesting stories about foreclosures that I bought about 10yrs ago (on the courthouse steps). If I get some time later, I'll talk about some lender mistakes that caused me to be compensated by the lender and some other stuff that people here might find funny or strange.
Doesn't title insurance only cover the purchase price of the house? What if someone has put thousands of dollars into repairs and now because of sloppy paperwork the house reverts to the original owner? Who is going to cover that? I guess it is just tough luck for them. Still makes me think that people should stay away from foreclosures until this paperwork mess gets sorted.
VA_I, I'm sure that I am not the only one here who would enjoy reading your stories.
VA & Ace-I am always interested in good stories :) Hayfield-Yes you would likely only get the purchase price of the house back, which goes back to my original comment today that these risks are why you get a better price at foreclosure auctions. I would think that many investors are shying away from foreclosures now, so their prices may be even better than usual. If you were really afraid about losing your house I bet you could get the person who is losing their house to sign a contract saying they will not try and get the house back if you give them $1K.
I know these numbers are national not local, but I find it interesting that even in the strong near term recovery scenarios that Moody's does not show house prices rising past 2Q10 prices for 3 years. Although their baseline scenario isn't that bad either... moody's house price scenarios
i like stories, too.hey ace--saw your shout on the other thread. good to "see" you!question: does anyone have any hard numbers on prince william county foreclosures? i know we used to keep track, but i lost count a while back. i thought i remembered that a ridiculously high percentage of total housing units had gone through the foreclosure process already...
http://franklymls.com/DC7364908Assessed at 379K, Sells for 180K,That's exactly 50% offPretty good condition.
Post a Comment
Subscribe in a reader