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Rachel LaMar, J.D.'s Blog

By Rachel LaMar, J.D. | Broker in Carlsbad, CA

Buy Back Your Home AFTER Foreclosure

Has your home foreclosed (or is about to) and left you feeling desperate and uncertain? Would you like the opportunity to get your home back, even post-foreclosure? You may be in luck.

There is a new option available which allows foreclosure victims to  BUY BACK their homes from the bank. It is gaining momentum and may not be a viable option for a long time, but if you are in this situation and are employed, keep reading.

With all the options available to help struggling homeowners avoid foreclosure this is the first that deals with the problem after the fact, and believe it or not it IS working for many people. Some attorneys and non-profit groups have been very successful in submitting offers to lenders on behalf of the recently displaced homeowners.

In a sense this works like a loan modification after the fact, so the homeowner will still suffer some credit ramifications from the foreclosure, but will be able to buy their home back from the bank at a price that is comparable to recently sold homes in the area, which means monthly payments will be more affordable. Many of these homeowners were unable to work out modifications or use other options to save their homes, and many are still living there and have not been presented with a notice of eviction from the lender.

Why is this buy back option so successful?

1.  It is unlikely that the lender, the new owner of the property, will find a buyer to purchase the home at a cost that would narrow the gap the lender has opened through the foreclosure process. Plus, in this market it is likely the home will sit for some time, causing further loss to the lender. Selling it back to the owner is a win-win, as there is no market time expended and no monthly payments to be doled out by the lender. A quick close can be arranged and everyone wins.

2.  Abandoned homes can fall into disrepair. This can force the lender to pay lots of money for upkeep. A home that is not cared-for is unlikely to sell.

3.  With credit damaged from the foreclosure it is not likely that the homeowners will be able to get a loan for a long time–this is the chance to stay in their home with an affordable payment, instead of putting them out on the street.

4.  This option eases the lender’s already overflowing portfolio–it is one less home to worry about.

There is really no valid argument against buy backs. Some lawyers are already doing so and charge minimal fees to negotiate with the lender.

If you live in the San Diego area and would like a referral to an attorney who knows how to do this and has a success rate please feel free to email or call me and I will pass the information along. If you are in another area I would recommend calling real estate attorneys and asking if they do this, and if not see if they can refer you to an attorney who does.

Another option is to contact a non-profit group who can help you or point you in the right direction. If you live in Boston there is a group called Boston Community Capital, and they currently have about 30 borrowers in the process of buy back negotiations. You can call community resource organizations, the city offices, or call HopeNow and see if they can help. Their number is (888)995-HOPE.

Keep in mind that you DO have to be employed and be able to show that you can make the payments on the new loan. If this is not an option for you I suggest you read up and learn all the possible options that ARE available before it is too late and your home is sold. A great resource is www.MortgageWalkawayOptions.com. Best of luck!

Comments

By Dennis Smith,  Fri May 15 2009, 21:31
This may be an option with some lenders but many of them state in their counter offer that the buyer can not have any prior relationship or agreement with the sellers. That would preclude buying your own home.

I know of one family that was renting a home that was being foreclosed on. The bank would not let them buy the home as a short sale or after the foreclosure sale because they were living in the home. They were willing to pay fair market value for the home. They even talked to a senior VP at the bank and he said NO. It is our policy. You have to move out first, before you can buy.

Our tax dollars at work???

You can view all available San Diego area homes for sale at
http://www.sandiegohomes4u.com/MLS_Search.htm

Dennis Smith, Foreclosure Specialist
Taylor Place Real Estate
dennis@SanDiegoHomes4u.com
760-436-0087, or cell at 760-212-8225

View all available San Diego area homes for sale at
http://www.sandiegohomes4u.com/MLS_Search.htm

My Market Trends Report with graphs and charts for North Coastal San Diego
will give you the Sales Statistics for the month and compare it with last year, by city!
http://www.sandiegohomes4u.com/RealEstateTrends.htm
By Annis Thomas,  Sat Dec 25 2010, 15:01
I live in Raleigh, NC, and I am still in my home, real soon to be notified to vacate. My home is forclosed, and the VA now owns it, I'm a veteran. I first bought it at 105k and now the VA is only asking 80k for it. I am working plentiful now, I have a full time and a partime job. I need someone to finance a mortgage for 80k. Please help me while I am still in the home. Annis Thomas, 919-412-3822c or 919-250-9117h. Please call me as soon as possible, Monday after Xmas would be excellent or sooner. Help me or advise me who to contact in Raleigh, NC. Thanks
By Dennis Smith,  Sat Dec 25 2010, 16:57
I recommend you copy and paste this question as a new question. You will get more responses to your question. Good luck.

Also, as Rachel said above:
Another option is to contact a non-profit group who can help you or point you in the right direction. If you live in Boston there is a group called Boston Community Capital, and they currently have about 30 borrowers in the process of buy back negotiations. You can call community resource organizations, the city offices, or call HopeNow and see if they can help. Their number is (888)995-HOPE.

Dennis Smith, ABR, SRES, e-PRO, CDPE, Realtor® Lic #00476662
Certified Distressed Property Agent
RE/MAX By-the-Sea, Carlsbad CA
By Rachel LaMar, J.D.,  Sat Dec 25 2010, 18:25
Annis,

I am so sorry to hear of your troubles. When I wrote this post back in 2009 there were several attorneys I knew of who were successful at helping with buy backs. They do so no longer. Dennis is correct in that lenders have become even tougher today. His idea to post your answer as a question to the real estate community is a great idea.

I am not a mortgage broker and do not know of one who can help you in NC. Do try the agencies I mentioned in my post, as well as local agencies in your area.

Best of luck,

Rachel
By Sweety0927,  Mon Mar 28 2011, 08:44
WE LIVE IN FLORIDA BREVARD COUNTY OUR NEIGHBOR HOME FORECLOSED AND THEY HAVE BEEN EVITED CAN THEY BUY BACK THEIR HOME HE HAD NO IDEA THAT HIS WIFE STOP PAYING THE MORTGAGE AND HAS THE MONEY TO PAY SOMETHING BACK.
By Rachel LaMar, J.D.,  Mon Mar 28 2011, 12:53
Hi there to the last person to comment,

Unfortunately I have no idea how to help your friend. I wrote this post several years ago and I do not know of any lenders now who are entertaining buy backs. Since the home already closed it is likely too late, but your friend can try and speak with his lender. The foreclosure process is quite lengthy so most lenders will not consider this, as in their eyes the borrower had sufficient time to pay up what was delinquent before the home sold. Best of luck to your neighbor--the best advice I have in this situation is to have him contact a local attorney.

Regards,

Rachel
By Venita,  Fri Mar 16 2012, 15:43
I live in texas was trying to get a Loan Modacation and they forclouse on my home what do I do now
By claritamunoz79,  Wed Jun 19 2013, 21:49
I was victum in 2009 home robbery, nervous break down left good job deep depression, affect my three sons now we have only till june 30, 2013 to be evicted . we have the income to support our home . ask chase now federal home loan can we please buy our home back.. of 25 years , i paid it of in 2005 with washington mutual help dear Gods helper sadden family losing hope please
By bsculp69,  Tue Jan 7 2014, 09:30
my house was forclosed can I buy it back I have 5 months to move out
By Rachel LaMar, J.D.,  Tue Jan 7 2014, 09:47
I wrote this article 5 years ago, and do not currently know of any lenders who are allowing buybacks. I suggest you contact a real estate attorney in your area and discuss your options. Best of luck.

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