Home Buying in Los Angeles>Question Details

mjtrevor155, Renter in Pasadena, CA

I see alot of properties that are listed here as foreclosure/notice of default. Whats the process of getting more information?

Asked by mjtrevor155, Pasadena, CA Thu Dec 26, 2013

Noticed some houses are listed at $84,000 or $190,000 when they are definitely worth more. What does this number mean? Is it the amount the owner is behind in payments? Can you typically get a better deal going about a foreclosure? Would you work with the bank directly or a Realtor?

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BEST ANSWER
Finding a foreclosure property is not hard to do. However, the inventory has dwindled and property inventory is down. Much of the "shadow inventory" has been either sold off to investors, private parties, the owners have done loan modifications or short sales.

Depending on your needs and financial situation, it may be your best be to speak with a Realtor to discuss your options and figure out a game plan.

The foreclosure process starts when a homeowner does not pay their mortgage for a minimum of 3 months. Then a Notice of Default (NOD) may be filed against the property. These notices are public record and this is what you are probably seeing here on Trulia.

However, many of the NOD's may be very old. In some cases, they may be over 3 years old and there is a history that has transpired during this time.

When a NOD is filed against a property, due to the Obama Home Affordability Act, the banks must reach out to the homeowner to attempt to resolve their mortgage deficiency by offering solutions like bringing he loan current, doing a loan modification, refinance or restructure of loan, short sale, deed in lieu of foreclosure or just to go to foreclosure.

What happens in this case, is that this ties up the property for several months, sometimes for several years, whereas the homeowner sits in the house, either making reduced monthly mortgage payments or no payments at all...attempting to do a loan modification or a short sale until the bank decides that they will or will not qualify and then they either get the loan modification or foreclose.

The process can be lengthly.

Once the NOD time period is up, which is usually 3 to 6 months, depending on where the bank is with the process, then the bank will file a Notice of Trustee's Sale (NOTS). This notice tells the homeowner that the property will be sold at auction on a specific date if the mortgage loan is not cured. This usually gives the homeowner 23 to 30 days before the auction date. This is also public record. However, the auction date is subject to change, be postponed or be canceled depending on what the homeowner and bank decide to do.

If the homeowner is in the loan modification process, the auction date may be postponed until final determination by the bank. The homeowner may file bankruptcy, which will postpone and/or cancel the auction date until the bankruptcy is discharged, which takes about 6 months from the date it was filed with the courts.

I had a short sale client who stayed in their house for 3 years without paying their mortgage. I have heard of people doing this for up to 5 years.

So, as you can see, these NOD's on Trulia may not be accurate. Your best bet is to work with a Realtor who knows this process and can take you through it.

Your other option is to learn how to track the NOTS's and then go to the Auctions to purchase the homes. For this, you will need to have cash on hand for the purchase price.

There are also websites where you can bid on properties...sight unseen...I don't recommend that because you may be getting a "Money Pit" home with deferred maintenance and other major issues.

Make sure you see the property first and take a licensed contractor with you to evaluate the property.

Let me know if you have any questions. I would be more than happy to assist.

I have a major foreclosure background...I worked directly for the banks liquidating foreclosures in the past. Keep in mind that the inventory has dwindled down.

Good luck!

All the best,

Kat Becker, Realtor
2 votes Thank Flag Link Fri Dec 27, 2013
Yes I do. Feel free to give me a call when your ready. Also, you can search my website for free to look at properties.
(323) 819-4760.
All the best,
Kat
Flag Sat Jan 4, 2014
Thank you for the lengthy and very informative response. Definitely will have to start looking around. Do you deal with the San Fernando Valley/Woodland Hills to Westlake Village area?
Flag Fri Dec 27, 2013
If looking at RealtyTrac ads--keep in mind that RealtyTrac's information may not always be accurate and oftentimes can be misleading, some of those properties may not be for sale yet, and some may never be, if the default is satisfied by the owner. If you are interested in foreclosures, work with an agent, as most do end up being listed by a broker--he/she will have access to reliable information--also don't overlook traditional sales as some may turn out to be a much better bargain than some of the foreclosure properties.
1 vote Thank Flag Link Fri Dec 27, 2013
A good realtor can help get you the information you need.

For mortgage help, call (630) 639-1081 or email for a free pre-approval in less than 10 minutes. We lend our own money and are licensed in 49 states and you can apply online at http://www.myccmtg.com.

We can do: FHA, Conventional, USDA, VA, HARP, Interest Only, Home Equity, Fixed, and Variable. Find out which product is right for you by calling Brad at (630) 639-1081.

Brad Neumann
Sr. Loan Officer
Crosscountry Mortgage Inc.
Phone: (630) 639-1081
Email: bneumann@myccmortgage.com
NMLS# 948036
0 votes Thank Flag Link Sun Jan 5, 2014
The fact that the homeowner received a notice of default or foreclosure notice only means that the borrower is likely in arrears. It does not mean the house will go on the market.
The amount listed is the amount the borrower owes and not the value of the home.
The foreclosure process is lengthy and hard to predict as an outsider.
There are companies that will sell you lists, however, a property can come off the list as a foreclosure as late as the same day of the foreclosure sale.
Foreclosures occur on the courthouse steps and are an all cash transaction without Title insurance.
So in order to get into purchasing foreclosure properties, you really have to know what you are doing, or hire someone that does.
0 votes Thank Flag Link Sat Dec 28, 2013
This number is how much is owned on the loan that was foreclosed upon. So, this is the number they are looking to get in return.

Alex Greer
Loan Officer
NMLS #1056079
http://www.TheMortgageOutlet.com

408-352-5147
AGreer@TheMortgageOutlet.com
0 votes Thank Flag Link Fri Dec 27, 2013
I disagree. I think terms also can play a part, as well as preapproval status / cash offers. A bank may accept a 270K cash offer with only a due diligence contingency over a 300K offer being financed. Sometimes, depending on where they are in the fiscal year, etc, banks may accept lower offers with lower risk of contract default just to get the property off their books.
-Alex Lovell
Equity Real Estate - Advantage
Flag Sun Jan 5, 2014
They will always accept the highest offer. So if you do a 250K offer and someone does a 300K offer obviously you will not be accepted.
Flag Fri Dec 27, 2013
If the number posted is say $250,000 would a bank ever take a third party, say me, offer of $250,000 to just get the property off their books?
Flag Fri Dec 27, 2013
Trulia is great for a lot of things but the way they list foreclosures is somewhat lacking. I wrote a blog about finding foreclosures on Trulia, I'll put a link to the blog in the web reference below. That should answer all of your questions.

J.R. Thrasher
http://www.SanDiegoRealEstateVeterans.com
619-929-0105
0 votes Thank Flag Link Fri Dec 27, 2013
Hello,


You will need to work with a realtor to purchase a bank owned home. Banks do not negotiate directly with buyers. The banks have assest managers who assign the listings to realtors who in turn put the on the market.

If you want to have a chance at buying a bank owned home, I suggest you start working with a realtor. He/She can search for bank owned homes for you.

Bank homes do often sale below market value, however in some market the sale almost right at market value.

Some bank owned homes will not meet funding requirement for a loan. For example they may have broken windows, or other health, safety or code violation issues.

Remember, bank owned homes sale like a silent auction. Be mindful to make your best and final offer out the gate. REO agents do not counter all offers, in most cases they select the best a highest offer and hold the others as back up offers.

Last, be patient. It may take several attempts before you get an offer accepted.

Best of luck to you!!!

Kawain Payne, Realtor
0 votes Thank Flag Link Thu Dec 26, 2013
Thank you for the response--very informative
Flag Fri Dec 27, 2013
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