Home Buying in 90621>Question Details

Theresa, Home Buyer in Buena Park, CA

can somebody be qualified to buy a house but less than what the person loss in foreclosure?

Asked by Theresa, Buena Park, CA Sun Jan 11, 2009

for example a person loss a house worth 450,000 but then now the person is trying to buy a house worth only 120,000 and has the money to make down payment will that person be qualified to buy it or the person has to go for auction and find a lender to finance the remaining amount

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3
Theresa -

I'm as confused as Randy with your question. I see at least three scenarios from your question -

1) A person lost their house and now wants to buy another for less money - If that's the case, the person who lost their house will likely not qualify for any loan for about 5 years. Foreclosure is a "Credit-Killer" and lenders just won't lend to people who didn't pay their prior mortgage. This person could purchase the house for cash but I think the prior lender who foreclosed on the property might have a method to go after them for the deficiency on the prior loan if all this cash re-appears. Also, they cannot re-purchase their prior (foreclosed) home, it must be an arm's length transaction - in other words not a relative.

2) A buyer is looking to purchase a property that was previously foreclosed at a much higher price than it is currently worth. In this situation the buyer must qualify with a lender to purchase the property unless they are paying 100% cash. It has nothing to do with the former owner.

3) Auction property - County / Lender Forecloure Auctions properties are to be paid for by Cashiers Check or using a Bank guaranteed Letter of Credit. Properties sold by Auction Companies such as REDC can be financed at the Auction after payment of 3% of the purcahse price is provided in certified funds at the auction. They have lenders on-site to close loans right there.

I hoep this covers your question - I'm just not sure !

Best,

Thom Colby
Broker & Realtor
Orange County, CA
Web Reference: http://www.thomcolby.com
0 votes Thank Flag Link Sun Jan 11, 2009
It sounds like she lost her house to foreclosure and now wants to buy another one. I think FHA won't allow another purchase for 5 years after a foreclosure, but I thought I might have seen that they are now saying three years. Either way, your interest rate will be much higher since you've already shown that paying your mortgage isn't a priority. Other lenders are longer. If you did indeed let your home be foreclosed and you have downpayment, that's pretty crappy since it means you just chose not to pay your mortgage, a contract you signed.

At auctions you have to pay in full with a cashier's check.
0 votes Thank Flag Link Sun Jan 11, 2009
Hi Theresa!

I'm not sure I understand your question. If you want to buy a house for $450K or $120K, or any price, the only basic requirement is that you be able to qualify for the loan. It has NOTHING to do with the property owner, whether it is a bank or not. Does that answer your question? If not, let me know!

...randy
0 votes Thank Flag Link Sun Jan 11, 2009
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