Buying foreclosure property straight from the lenders

(Los Angeles County, CA)

joe Smidt replied on 2 Dec 2009 09:26 AM

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you will never make contact with anyone from a loss mitigation department. The banks do not care about the comission that they pay realtors. A Realtor will help you with local comps to make sure you are not paying above market value for your home.

darenb replied on 2 Dec 2009 09:54 AM

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Sam,

While it can be very difficult to contact the lenders directly, it is not impossible. From talking to RealtyTrac members who have successfully purchased bank-owned properties, it requires a lot of persistence and different forms of communication to get through to the lender.

Unfortunately there is no set formula or procedure for making it work, but I've heard of people faxing in or even mailing in their offer to the lender. Usually something like that is not ignored. And just calling the lender repeatedly may annoy them enough to give you some attention. I just talked to a Realtor in Georgia who specializes in foreclosures and short sales, and she said she calls lenders involved in her short sales three times a week as a rule.

You'll probably have better luck with foreclosure properties that are owned by local community banks rather than behemoth lenders. And if you are an investor who is interested in more than one property, you can let the local banker know you are interested in any future foreclosure properties they acquire.

Sam replied on 2 Dec 2009 10:53 AM

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darenb - Thanks for the lead. I have some idea something like that but I was not sure that is the way to go. Since I have a feedback from you that will support my thought.

gulfredneck replied on 3 Dec 2009 04:07 PM

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go directly to the lender involved in that property and talk to an officer but remember some states have a one year right of redemption clause that lets the original borrower get back in so dont make any remodeling additions or upgrades unless you get a quit claim deed from the original borrower  exception is storm damage to protect the property from further damage and you may be able to get that storm damage money back if the original borrower reclaims the property.  check with your attorney  lots of luck on your endeavors- -gulfredneck

Richard The Great replied on 4 Dec 2009 09:57 AM

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Buy this book and learn the truth!

"The Per-forclosure property investor's Kit"  by Thomas J. Lucier.

His emai address is:  tjlucier@thomaslucier.com.

To answer your specific question, You as an investor or buyer are not allowed this information directly!   You must contact the property owner (mortgagee) and get them to send a "proper letter" to the lenders "loss mitigation department" requesting that all the information you need be e-mailed/faxed to you.

He provides, free of charge, all the forms you need. If they are not on his website, he provides likns to get whatever form you need in YOUR state.

rsharga replied on 17 Dec 2009 05:16 PM

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I'm familiar with Mr. Lucier's book, and it's well written. However, the book, as the title suggests, is about "pre-foreclosure" properties, NOT bank-owned properties. Richard the Great is right that when buying a property in the early stages of foreclosure, the only person who can sell it is the homeowner, and banks are either not allowed or not inclined to give out much information prior to the auction.

Once the banks have foreclosed on the homes, however, you can contact them directly about individual properties (and the original homeowner is no longer involved). As you've read in some of the other posts, getting in touch with the right person at the bank and negotiating a deal isn't necessarily easy, but it also isn't necessarily impossible.

Good luck!

UtahRealtor replied on 18 Dec 2009 12:12 PM

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Nearly all banks already have systems established for selling their properties, they almost always involve listing the properties with a leading local real estate brokerage. That doesn't mean it's impossible to buy directly from a bank, you'd just have to find the right bank, likely a small local one, and get an in....

Real Estate club replied on 22 Dec 2009 11:47 PM

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Hi: I think, first is the auction, where anybody can bid, and if there is not offer, the property gos back to the lender,and becomes a REO. , you can make an offer to Bank/Agent.Raymond cel. tel: 561  502-4583

Nashville Grant replied on 23 Dec 2009 07:30 AM

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Here is the real answer.

At the actual point of foreclosure, there is a foreclosure auction. This auction usually takes place on the county's courthouse steps and the lien holder usually has a rep there that will buy the property at the existing lien amount. If you don't want to pay more than the original mortgage, and you usually don't, then you have to follow these next few steps:

Banks/lenders always notify their REO agents that a property is coming back to them in order to solicit BPO's first. At that point, they are really the first people to know about a foreclosure. Once the bank/lender chooses a specific agent, that agent is responsible for whipping the property into shape - turning on all utilities, hiring contractors to clean the property, remove mold, replace carpet, windows, etc. At that point, the agent will then list the property on the MLS and being taking calls.

In order to beat this process, you must cozy up to one of these REO agents (not hard to find) and ask them to tell you about a property before it hits the market. Typically, these agents are restricted from buying their own listings so you are protected from that standpoint.

I have managed to secure 5 properties in Nashville in 2009 using this method, all before the general public was able to gain any knowledge of the availability.

uk1981 replied on 12 Jan 2010 03:34 PM

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I guess I don't get the "a one year right of redemption clause" mentioned.  When a property becomes REO, the original borrow has lost his rights to do anything - he is history. At least that is what I have been led to believe.  If that is not the case, then why would anyone in his / her right mind every buy one?  That is what foreclosure means (or so I thought until now) - so please correct me gulfredneck because I am at a loss.  If property is in a preforeclosure process, then why would anyone call the lendere?  Only the property owner at that time can release the house to you.  So, getting the quit claim is one method but then why would you want to buy someone else's house that is underwater?  After all, if the property owner had equity he / she would not have trouble unloading it.    I must have fundamental memory lapses but gulfredneck's comments have me scratching my head.  Please comment - all! Thank you very much. 

rotty88 replied on 16 Jan 2010 08:22 AM

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A homeowner has the right in some states to buy the property back from you when you buy at auction I believe. If they do buy it back you gain interest of approx 12% on the money you invested,plus your money back.Your also subject to any liens on the property,back taxes etc...

When a property is REO,the bank clears the title and you have nothing to worry about, no past liens as they were cleared by the bank foreclusing on the original mortgage.

oakcal0310 replied on 5 Mar 2010 12:33 AM

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Hi Grant:  Thank you for the useful info. I do not mind hiring an agent who is really knowledgeable about the process as well as having good access with the lenders. But I am in northern California, and have not been able to find such an agent, or REO agent as you call them. Those agents advertized on every page of Realty Trac are actually fake, just a plain realtors without any specific knowledge or experience in foreclosure transaction, much less the concrete lead to specific properties on that page. I had been disappointed. 

So how can I find a good REO agent?  Any suggestions?       

Small Investor in Northern California looking for some multi-family apartments

Nashville Grant replied on 5 Mar 2010 06:07 AM

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There are certainly a lot of pretenders out there right now. Look for a Realtor with his/her SFR designation from the NAR: http://www.realtorsfr.org/members.html