Sandy, Home Buyer in Dexter, MI

is it possible to land contract a forclosed home???

Asked by Sandy, Dexter, MI Tue Jun 19, 2012

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5
Unfortunately not. Lenders want their money or they are willing to lend you the money to purchase it--but getting a mortgage is very different that having a private owner carry the note.
0 votes Thank Flag Link Sun May 12, 2013
Hi Sandy, no it's not. If you are trying to finance a home using a land contract from a private owner that is in foreclosure, you will end up losing your downpayment and any money you might have made in payments. Just because a private seller sells on a land contract doesn't stop or change the foreclosure process. Michigan is a recording state, which means if the mortgage was recorded before the land contract, the foreclosing mortgage will wipe out the land contract and take the property.

If you are asking the foreclosing bank to accept a land contract, they are not really set up to do that. Typically they are selling the foreclosed property to recover as much money as they can and they are not prepared to accept monthly payments. When they do sell, if you need to finance the purchase, they would require you to obtain a mortage which would then be using the property as security for the loan. Hope that helps!
0 votes Thank Flag Link Sun May 12, 2013
Hello David and Nichole...
Thank you for your inquiry, but I'm afraid I misread your original question. I thought you were asking if it were possible to "land a contract", rather than what I see now that you meant, a "land contract". Landing a contract is no problem, getting a land contract is a very different story. I have not heard of any banks willing to do that with foreclosed properties. They typically want their money and to move on, so I would be surprised if you found one that would accept a land contract. I say "surprised", but that doesn't mean it can't happen. Banks are like people, they have different personalities and attitudes, so you may very well find one that will work with you. Best of luck in your home search...Jim
0 votes Thank Flag Link Wed Jun 20, 2012
Sandy,

I haven't hear of any lenders that would do a land contract on a foreclosed home. They want to get the file off of their desks by being paid off on it.

Good Luck,

Karen Paytas, GRI, CMS
Realtor
Real Living Kee Realty
586-709-8465
kpaytas@mirealsource.com
0 votes Thank Flag Link Tue Jun 19, 2012
You bet, people do it thousands of times every day. Did you have a particular property in mind? I suggest you enlist the services of a good realtor, who has experience in doing it so that you can benefit from their experience at no cost to you. The bank has already agreed to pay for both agents (theirs and yours), so take advantage of it, it's free to you. If you don't, the bank will still pay the same amount for the commission, but the bank's agent will just get it all, so you would be wise to get the benefit of that money too! Best of luck in your search...Jim
0 votes Thank Flag Link Tue Jun 19, 2012
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