I'm stumped about foreclosures, particularly in the Port Charlotte/North Port Florida area...are those that want to finance discriminated?

Asked by Hollywoodncatmpr, Palmetto, FL Thu Jul 28, 2011


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The Brooks T…, Agent, Englewood, CO
Thu Jul 28, 2011
That is a really good question. As an agent who list some bank owned property, it can also depend on the condition of the home, and how the listing agent presents the condition to the seller. Some homes may not qualify for specific types of financing. When listing agents of bank owned properties inspect the home they must report any damages and/or missing items to the property which could effect the terms of the purchase. For instance, if the property does not have an a/c system, or well equipment, etc., typically the home will not qualify for an FHA mortgage. With that being said when an offer is submitted with FHA financing, the seller (foreclosure rep) will typically decline the offer. If this is an issue you may want to ask your lender about an FHA 203K, which can allow for repairs. In addition homepath for specific Fannie Mae foreclosures is a good program to look into as well. It could be the terms that were offered as well. On a home that qualifies for all types of financing, the highest offer with the best terms always will win!
1 vote
Robbie Sifrit, Agent, Punta Gorda, FL
Thu Jul 28, 2011
The lenders really don't care. They are looking at the bottom line. However, in many cases we are in multipe offer situations. So, if you have two offers with the same purchase price, then the seller will look at the "terms" which also makes up your offer. If one is cash and the other financing, cash will win out.

All that being said, many foreclosures that first go on the market have a period of anywhere from 7 to 30 days whereby only owner occupants can bid. And, many of these are usually financing. So, don't give up. If you have patience and persistence, you will find the right home.

And, there are many other homes on the market - regular sales - that are just as competitive price wise as some of the foreclosure. On the face, foreclosures look like good deals, but these home usually need work. By the time you pay for the house and do the repairs you may find that a regular sale of a home ready to move in at a higher price, may be just as good a deal.

I live and work in Port Charlotte, and would be happy to assist you any way I can.

Linda Atkinson, PA, ABR, GRI
1 vote
Genevieve Ra…, Agent, Punta Gorda, FL
Thu Jul 28, 2011
Cash buyers generally have the ability quickly. I have seen listings that stated very clearly, "Cash Buyer only" Don't like it, but don't know why it was listed this way. My buyers were qualified and had pre-approval and could close in 15 days, but still rejected.
1 vote
Danielle Sha…, Agent, Cape Coral, FL
Thu Jul 28, 2011
Loaded question. Fannie Mae & Freddie Mac foreclosures are ideal for those owner occupants financing since the bank shows favor to this segment of purchaser, at least the first 15 days on market. If you submitted an offer on a bank owned property and your offer was rejected it may not have anything to do with obtaining financing but the terms you offered forth. Did you offer a fair price for the current condition of the home? How long was your inspection period? What kind of deposit did you offer? All of those details are very important.
1 vote
Tammy Hayes, Agent, Port Charlotte, FL
Wed Aug 3, 2011
Buying a foreclosed property can differ in many ways than other more standard transactions. All offers are contingent on financing and must be accompanied by a pre-approval letter. Some banks require a pre-approval letter from a certain lender, so be sure to read guidelines before submitting an offer. All cash offers require proof of funds with the letterhead of where the funds are being held and the buyers name listed. Actual account numbers can be blackened out, as long as buyers name is easily visible. Write your offer as seller chooses the title company as they have already started preliminary title work on these properties.

All offers must be written offers, on an As-Is contract only Some banks supply addendums in advance, and if that is the case it will be in the MLS as an attachment and should be signed and dated and submitted along with your offer. In most cases, however, the bank addendums are provided only after buyer and seller come to agreement. At that time, the bank will send their bank addendums/counter offer for buyer's signatures. Please note at this point, the bank has still not signed anything, and most likely will not sign until ALL forms have been signed by the buyer. Your offer is considered a pending contract until it is returned from the bank/seller with their final approval. In the interim, all offers that come in must be presented. When signing and initialing a bank addendum, do not alter it in any way or it will be rejected.

The usual time frame for a response to your offer is 3-5 business days, although sometimes a little sooner and occasionally a bit longer. Allow plenty of time for acceptance, and for closing the deal, 30-45 days in most cases.

If you are requesting seller concessions for buyers closing cots, pre-paids, or repairs, make sure those are requested in the written offer, as adding these things at a later date can be very difficult and most times impossible. If you are writing an offer for an FHA or VA purchase, please make sure the property will meet the standards for this type of financing. The majority of the time, repairs are not permitted prior to closing. Ask the lender if they allow the buyer to escrow their own funds for repairs.

Once you have a fully executed contract, time is of the essence. All inspections must be done in a timely manner according to the contract. Should the buyer not be accepting the conditions, written notice must be obtained prior to end of inspection period along with a signed cancellation and release form. Some banks will make earnest money non-refundable after the end of the inspection period. Read your addendums carefully.

Please note that bank owned properties closings are considered mail-aways, because the title companies that are used to close the transactions are usually located out of our general area. Some will send a mobile notary to the buyers agents office to close the transaction and then all documents are overnighted to the title company, but it is not considered officially closed until all original documents and funds are received.
0 votes
Alma Kee, Agent, Tampa, FL
Sat Jul 30, 2011
Oh, I had to mention that Fannie Mae owned foreclosures actually discriminate against non-owner occupants. For the first 2 weeks the property is on the market, they will not consider any offers except those from buyers who intend to make the property their primary residence. Of course you must make sure the property is in acceptable condition for the VA appraiser (and if 1978 or older it cannot even have peeling paint because of lead based paint!) so you don't waste money paying for an appraisal if the house will not pass the inspection!

Good luck!
0 votes
Ron Thomas, Agent, Fresno, CA
Thu Jul 28, 2011
I'm looking at the last part of your question:
I am going to assume that you meant to say "re-finance" as in loan modification to avoid foreclosure.
Let me update you:

Loan Modification
Here is some information that might start you on your way to understanding what’s going on with Refinancing, Loan Modifications and in particular, Obama’s H.A.R.P. Program:

One report I read, showed that during the initial HARP period, only about 10% of the goal was achieved for helping homeowners in distress. While 10% is a pitiful result, the scuttlebutt is that the actual number is considerably lower; possibly as low as 60,000 (3%)!

One explanation was that INTEREST RATES had fallen so low, during the life of the program, that the Banks were doing Loan Modifications on their own! (Unbelievable!)

I understand that the primary reason for the breakdown in communication, is a new-fangled problem called “OUTLYING”:
What this means, is that when a Lender declines a Refinance/Modification and they report the results to HUD, they do not have to give a detailed reason or explanation; they can merely say that the “APPLICANT WAS NOT QUALIFIED” or “THE REQUIREMENTS WERE NOT SATISFIED”. HUD has been blindly accepting these refusals as Gospel and has not looked into the details of what these phrases mean. The Bank does not have to justify anything, they do not have to explain themselves to anyone. When they decline an application; they do not have to give the Homeowner or the Government a reason.

In addition; the initial parameters for Fannie Mae were 80 to 105% of the Loan to Value ratio, which was ludicrous. With the recent extension, this figure has been increased to 125%, which means that if the property had DECREASED more than 25%, then the new loan will not cover it and therefore will not qualify. (Those of you who are Math Whizzes and Mortgage experts; please check me on this; it’s confusing).

There is absolutely no incentive for the Banks to give away anything; particularly PRINCIPAL!

There are two conclusions which can be drawn from this;
1.) Don’t expect to see a lot of Loan Modifications
2.) There should be a lot more investigation here.

So, the answer to your question; NO, when they do it to everyone, it is not discrimination.
0 votes
Scott Mason, Agent, Lecanto, FL
Thu Jul 28, 2011
Well cash is king but I have had cash offers on foreclosures that lost to a financed deal. Really it will come down to price offered and your terms. Just remember that there are a lot of buyers waiting for a good deal to show up, so when one does people jump all over it. The competition can be fast and furious so if you want to compete you need to have everything ready to submit an offer with a pre-approval ready at any time. Also you may consider having a larger than normal earnest money deposit ready to put down. Nothing says "serious buyer" like a large deposit.
Any other questions contact me, we'll discuss them.
0 votes
., , Punta Gorda, FL
Thu Jul 28, 2011
Cash buyers with proof of funds or finance buyers with preapproval documentation. I'm sure cash is preferred due to ability to close quickly.
0 votes
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