Foreclosure in Montgomery>Question Details

Househunter2…, Renter in Montgomery, IL

does foreclosure means that new buyer only has to pay the debt the previous owner left?

Asked by Househunter2233, Montgomery, IL Tue Jul 3, 2012

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4
This is a real shakey ground:

When the house goes through Foreclosure; all LIENS are supposed to be paid off:
If there are undisclosed liens, and you do not get Title Insurancem you may be on the hook.
If the creditor didn't file a Lien, for example the HOA, they might come after the new owner.

In any other case, you are not taking on THEIR debt, you are creating a new debt based on the purchase price of the house, (which will be less that they owed.)

You obviously need a good Realtor representing you.

Good luck and may God bless
0 votes Thank Flag Link Thu Jul 5, 2012
A new buyer gets a deed free and clear unless they purchase by quit claim deed, then could be responsible for taxes or other leins.

What the former owners owe really only matters when the bank makes the price they want for the home.
0 votes Thank Flag Link Thu Jul 5, 2012
The new buyer pays the transfer tax only. The formular is different for every location. Actually foreclosurese on average are 29% below market value.
0 votes Thank Flag Link Tue Jul 3, 2012
No - The previous owners debt has nothing to do with the new owner. The buyer will purchase the home for fair market value regardless of what the previous owner owed their lender.
0 votes Thank Flag Link Tue Jul 3, 2012
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