Foreclosure in Nashua>Question Details

Lene, Home Buyer in California, San Bern...

How are people buying another home when their current house is being forclsoed on? Two family members are

Asked by Lene, California, San Bernardino, CA Mon Jul 13, 2009

losing their house but are buying another (bigger and cheaper of couse with the housing market) house.

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Dane Hahn’s answer
Hi Lene,

There are many ways to skin a cat. And many ways to buy a home. Not having all the information, I frankly can't give you a good solid reasoned approach as to how the people you refer to could buy a home, following a foreclosure. Likely the people in question have not shared all their information with you.

If you lose a house to a lender, you will have serious credit issues--which most likely would keep other lenders from giving you financing to purchase a new home. Meaning that most people would NOT be able to buy and would most probably become renters for some few years. If they ARE able to buy, there would have to have been some cash down payment hidden under a mattress or in the private account of a family member or spouse.

Good luck,

Dane Hahn
1 vote Thank Flag Link Mon Jul 13, 2009
Lene if they are buying they are using owner finacing or Land Contract as it is called in some states. They may be doing a rent to own program. The most likely possibility is that they are renting a property and telling people that they are buying to try to save face.
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1 vote Thank Flag Link Mon Jul 13, 2009
There are several ways that people are pulling this off, many are people buying a new house and then giving back there old house as they owe too much. the kicker is these banks will noty let this go, the bank taking the loss will check to see if they can recoup any of these losses from teh howm owners, it will be a wake up when teh old bank comes to attach their new house for these losses.

it is not as easy as you may be seeing , they may get away with it for the short term, but the bank always wins...
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0 votes Thank Flag Link Tue May 17, 2011
Some people let their homes go. It is cheaper to buy the bigger one at less of a price.. They have to have good credit to get a loan or cash.
If you have good credit with the bank get a loan on a home up for sale, tell the bank it is an investment property, get a loan, buy. Now is when you get behind on your smaller home and let the bank have it after all you have 2 loans with them now, so let them have the house you don't want.
0 votes Thank Flag Link Sun May 15, 2011

Are they buying or leasing with the option to buy? there is a big difference.............
0 votes Thank Flag Link Mon Jul 20, 2009
Lene, Without knowing any specific details the common scam going on in the country, but not really here in NH is the people find a new home first, get the mortgage before their credit gets ruined and hand back the keys to the bank desserting the old house. Basically that is the short version... either way it will come back to haunt them. The old bank will simply attach the new house for the difference between what they owed and what the bank can sell the house for .... so they may think they pulled one over until the leins flow in... Hope this helps.
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0 votes Thank Flag Link Tue Jul 14, 2009
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