Posted by cathycrowe on February 22, 2000 at 13:02:42:
never in texas, the mtg. is not foreclosed on until it sells on the court house steps. if you want to redeem it you can by bringing payments, late fees, legal fees etc., up until the moment it goes on the block, but once it is sold it is sold. i have done in the past 13 years here in texas over 300 foreclosures, this month i did 5 i represent 4 large banks and have for 13 years.
explain to me how a mortgage is foreclosed on long befor a property is sold? they go hand in hand here in texas,
Just ran across a vacant home. I’ve learned from a neighbor that the owner died in July of 99. He had a mortgage on the home which was foreclosed on in January. I also found out that the closest relative is a daughter that lives in another city. My question is, do I contact the mortgage company or does this still have to go through probate. The foreclosure amount was in the low 30’s. Value of this home is around 60K.
Posted by John Behle on February 22, 2000 at 14:05:06:
There are different laws state to state. Since we don’t know your state - that is why there is controversy. Everyone is right - acording to their state laws.
Generally if the document is a mortgage, there is a right of redemption period of usually around 6 months where the owner (the estate or family) could redeem the property. That means they would have to pay off the loan or refinance. After foreclosure they can’t “re-instate” the loan, but can get the property back by paying the loan and interest in full.
So, if it is a mortgage then you do want to work with the estate. You can buy the property from the bank, but it would be subject to the “right of redemption”. Your best bet would be to negotiate with the family and buy out their right of redemption. Redemption periods vary state to state and my understanding is there are some mortgage states that still use mortgages, but have adapted them to be more like trust deeds.
If it is a trust deed - then it is a done deal. It is owned by the bank and the estate/family are out of the picture. In that case, they have no say or rights.
Each state has a preferred form, whether that is a mortgage or trust deed. Many states use both forms though one is preferred. Some states have a different form other than those two, but that probably doesn’t apply here. Being a bank, they would have used either a trust deed or a mortgage.
A quick call to a title company will familiarize you with the state forms. Also a check at the county recorder’s would find either a “Sheriff’s deed” or a “Trustee’s Deed”. Judicial foreclosure of a mortgage ends up in a Sheriff’s Deed. Foreclosure of a Trust Deed happens through an attorney or service that exercises the “power of sale” clause in the deed. No court is involved.
In almost all cases a foreclosure is a done deal, but it can be overturned by a court or dragged into a bankruptcy. Rare, but it happens.
Get control of the property by entering into a purchase agreement with the heir(s)or the estate, which may or may not involve the same person. The contract must be made subject to the heir (or estate) being able to convey clear title subject only to the first mortgage, since you haven’t done a title search.
Ascertain exactly what is outstancing against the property and perpare to satisfy or settle the lien obligations. You might be able to assume the first mortgge.
A word of caution: Buying under these circumstances is complicated and usually requires the involvement of an attorney, unless you are very experienced.
Re: Trust Deeds and Mortgages - Posted by Tymber (SF,CA)
Posted by Tymber (SF,CA) on February 26, 2000 at 12:20:15:
Question, part 2 on a vacant house I’ve been working on. The owner died, the neighbors don’t know who boarded up the house (been like that for months now) and the home was owned free and clear. Do you have ideas on who to contact (estate representative?)? I’ve tried the obvious from County records, phone directory, neighbors, etc. but so far, no luck.
Posted by CATHY CROWE on February 21, 2000 at 23:58:37:
ONCE THE HOUSE WAS FORECLOSED ON THERE IS NO NEED FOR PROBATE, NOR DOES THE RELATIVE HAVE ANYTHING TO DO WITH IT ANYMORE, CONTACT THE BANK…OR WAIT TIL A RE AGENT PUTS IT ON THE MARKET
Re: Trust Deeds and Mortgages - Posted by John Behle
Posted by John Behle on March 02, 2000 at 11:42:10:
At the recorder’s I would determine the last owner. I’d also check the tax records with the assessor. Since it is boarded up with no activity, it sounds like it could be a death.
I’d check the obituaries. Many papaers have that online now and you could search the name over the last year or two. That might tell you relatives. If there is something going on with an estate, you could tell that through the court system.
You can check the courts by going down and searching the name through the computer. Some courts are web accessible too. There is a pay system called “Pacer” but many are coming online now with a newer system called “Racer”.
If there isn’t evidence of a death, then there are post office records. Usually it is just a couple bucks to get a forwarding address from the post office. Also, If any of the utilities are still on, they would have to be sending a bill somewhere.
This is incorrect advice, and if you follow it, you’ll lose any opportunity there might be to get an investor-type deal.
Depending upon what stage a foreclosure is in, the heir(s) and/or the probate estate (if any, and sometimes one has to be opened in order to do the deal) has a great deal to do with controling the property.
That’s why you need a lawyer’s help. These are not quick and easy deals to do.
get me past the dead-ends I ran into so far and into the next layer of research. Our Post Office system is now litigation scared and won’t play the forward game except for attorney requests, but your walk-thru of where to go into obits and court system records to probe farther into the possible death/relatives lead was really helpful. Thanks.
Posted by cathy crowe on February 22, 2000 at 12:21:43:
he stated in his message that the house was foreclosed on in january. once it is foreclosed on it is solely the bank. there is no going back on a foreclosure no matter what the circumstances are…
Posted by NJDave on February 22, 2000 at 08:33:24:
Perhaps Kathy does not understand what ‘foreclosure’ means and is confusing it with a general (mis) conception. The majority of people think that a foreclosure means that the property is bank owned.
Any real estate 101 course will explain that mortgage foreclosure is a process, the mortgage loan is foreclosed (not the house), and until the former property owners rights of redemption have expired, the former property owner controls the property.
Posted by cathy crowe on February 22, 2000 at 12:27:13:
bank-owned, note owned,whatever, if a property is foreclosed on it is foreclosed. if it is posted for foreclosure it is pre-foreclosure and all kinds of deals can be cut, but once it goes to the court house steps, it is gone…here is texas there is never a right of redemption only on tax sales for 6 months.
Posted by Brandi_TX on February 23, 2000 at 03:16:24:
A quote from a paper from my county courthouse. (Yes, in Texas.)
“If the original owner(s) want to redeem the property from you, he or she has that right for six months after the date the Sheriff’s Deed is recorded. They must pay you 125% of what you paid plus costs. If the property was a homestead or agricultural land THE OWNER(S) HAS UP TO TWO YEARS TO REDEEM. (emphasis mine) They must pay you 125% if redeemed within the first year, and 150% of the purchase price within the second year. You MUST sell the property back to the previous owner(s).”
Seems to me that if a house has already gone to the steps, there would have to be a good chunk of equity to make it worth your time… but why could it not be done? The owner (or the heirs in this case) could redeem and then sell to you.
Why would they do this? No clue, but never say never.
Posted by NJDave on February 22, 2000 at 12:39:07:
I was suggesting that perhaps you are not entirely sure (as many are not) what ‘foreclosure’ means. A mortgage is foreclosed long before a property is sold on the Court House steps. I suspect that this is true in Texas, as well.
Posted by CATHY CROWE on February 23, 2000 at 10:08:28:
What you are saying is correct for a tax sale, or sherriff sale pertaining to taxes only. If a bank or note holder holds a mtg., on a piece of property in Texas once it is sold on the courthouse steps it is sold. There is no right of redemption on mtg. foreclosures. This sale is always held on the first Tuesday of each month. The tax sales are held whenever, whereever, and sometimes are on the first Tuesday and at the courthouse steps like the other foreclosures.
When buying on tax sale foreclosures, be very careful and have the title ck’d out carefully. I have never been burned, but know many people who have been.