Home Buying in 55379>Question Details

oswaldosoup, Home Buyer in Shakopee, MN

On Deed but not mortgage, home in foreclosure. Can I buy a house?

Asked by oswaldosoup, Shakopee, MN Wed Apr 10, 2013

Hello. Our home is in foreclosure and the redemption period ends 8/12/13. My husband is the only one on the mortgage, but I am also on the title/deed. I am pre approved for another mortgage, but will my name being on the deed affect me buying another house?

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Answers

9
Simply put, disclosure is key!

If the lender that pre-approved you knows you are or the deed but not the mortgage and note, and still issued a pre-approval, you may be okay. I say "may" be okay because details of pre-approvals vary and some are better than others.

Non-disclosure creates big problems for everyone, and my concern would be that you are asking the question here, rather than looking your loan officer in the eye and asking this question. It gives the impression you either haven't told your new lender, or if you have you don't trust them to give you an accurate/reliable response (a clear sign you've chosen the wrong lender).

I suggest you find a lender you trust. Disclose everything. Then get a conditional approval, not just the pre-approaval the automated underwriting system spits out of the computer, but one that was actually documented and reviewed by a human underwriter, and is conditioned upon finding an acceptable property. At that point you can go out and find a new home with a higher degree of confidence that you will actually get to the closing.
1 vote Thank Flag Link Mon Apr 15, 2013
Yes, I've disclosed all this information to the lender and he said I should be fine. Said that everything was approved through the primarily process and loan has been submitted to underwriting. Thanks for your help!
Flag Wed Apr 17, 2013
Hi, oswaldosoup!
I know our economy is in recovery, but it's still a tough time out there for many people. Sorry you're having to go through this.

All of my good colleagues here are correct, you may/may not have a problem with this scenario. Does your lender already know about this?? The key is transparency. If there are no surprises, it's much less likely you'll end up with a disaster at the last minute.

There used to be propaganda that "buy and bail" was illegal, but it is not, as long as it's disclosed. If it's not, your previous lender could still have some legal recourse and your current lender could claim mortgage fraud.

Good luck!
1 vote Thank Flag Link Wed Apr 10, 2013
I would just make sure you have a back up plan in case it does not close. I am not trying to be negative but this is called buy and bail. The loan officers can get your pre-approved but sometimes the underwriters can catch this and let you know you can not close. Just make sure your loan officer knows all the details and presents it correctly to the underwriter.

You will probably be fine and I have had several people do this and it worked out fine. I also have heard of people that this did not work out for. I just feel you should be planning properly and I hate to see people in a hardship if things go wrong.
1 vote Thank Flag Link Wed Apr 10, 2013
It has been a couple of weeks since you asked this question. I just wanted to let you know that I hope you are still working on getting through this and to keep your head up. You can get through it.

If you have any questions or need any help please do not hesitate to get in touch with me.
0 votes Thank Flag Link Sat Apr 27, 2013
Yes, everything is going well. I disclosed all information to the loan officer, and since then the loan has been approved through underwriting and am expecting to close in 3 weeks. Thanks for your help.
Flag Mon Apr 29, 2013
Simply put you will be fine. You can be honest and upfront to the loan officer because they really should not care. You being on the title/deed has no bearing for buying. Good luck!

~Chris
0 votes Thank Flag Link Wed Apr 10, 2013
The problem you might face is that you could be named in the foreclosure proceedings because you are on Title. If you are named in the foreclosure proceedings this information is likely public record and could effect your credit and your ability to purchase a home. The best bet is to talk to the lender and make sure he understands the situation. Just like buyers, sellers and Realtors lenders hate surprises. If you can address the issue ahead of time your lender will know the best approach and provide a plan to deal with the issue.
0 votes Thank Flag Link Wed Apr 10, 2013
Hi oswaldosoup,

Since you are not on the mortgage of your current home, your credit will not be negatively affected by the foreclosure. And, since you are already pre-approved for another mortgage, you should be fine. The only person negatively affected by the foreclosure is the person on the mortgage of the foreclosing property (your husband). It does not matter that you are on the Deed.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes Thank Flag Link Wed Apr 10, 2013
If you were never on the mortgage or the note, you shouldn't have a problem buying a new home. Check with your mortgage loan officer in order to verify this. Also, hire an experienced real estate agent to help you navigate this very unique market as many homes are receiving multiple offers.
0 votes Thank Flag Link Wed Apr 10, 2013
I should be upfront with the loan officer when I am doing this and let them know right away?
Flag Wed Apr 10, 2013
I believe this can be done but you have to approach this carefully with regards to the mortgage. I have known of people in the same circumstances. I would be happy to talk to you about this further. Also, there are some banks that will pay you to do a short sale instead of letting it go back to the bank. It is something extremely new that I just learn about.

Chad Kenning
Greater Midwest Realty
763-227-5458
0 votes Thank Flag Link Wed Apr 10, 2013
What are the odds that I put an offer in on a house and underwriting goes and sees my name on the title an upcoming foreclosure, and denies my loan?
Flag Wed Apr 10, 2013
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