Purchasing a Pre-foreclosure or Foreclosed home as a relative

Asked by nicoleg, 11757 Wed Oct 3, 2012

I am a 1st time home buyer looking to purchase the home of my grandfather. He passed away 2 years ago (at the time, I was not able to purchase a home as I was in graduate school). At this time, the home is in pre-foreclosure. I know that there are some issues for me as a family member. What are my options and how should I proceed if I seriously want to purchase the home? Is there a way to transfer the mortgage to my name? Is a short sale possible? How fast should I act (the home has been in pre-foreclosure for 2 months now)? My father was the executor to the estate - what are his options? Thank you for your help.

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Thomas Brady, Agent, Plainview, NY
Wed Oct 3, 2012
BEST ANSWER
Hi Nicole, you should contact an attorney that specializes in real estate to answer your questions. I can give you some general answers. Whose name is the house in now? They can sell you the home if it will cover the balance on the mortgage, that's the easiest scenario. A short sale must be an arms length transaction, no relatives. Just because the home is in arrears doesn't necesarily make it a short sale. A short sale would occur when the home's market value is less than is owed on the mortgage. Have a realtor provide you with a free CMA so you will have a better idea of the current market value.When you say pre-foreclosure I'm assuming you missed two mortgage payments, if that's the case you have plenty of time as foreclosure is a lengthy process in New York and usually takes years. Please feel free to contact me if you have any questions.
Thank you
Tom Brady SFR, e-PRO, SRES, GREEN, BPOR
Licensed Real Estate Salesperson
Notary Public, Retired N.Y.P.D. Lt.
631-682-8660
Tom@BradyFamilyRealty.com
http://www.BradyFamilyRealty.com
"We treat you like family!"
Charles Rutenberg Realty, Inc.
255 Executive Drive - Suite 104
Plainview, New York 11803
1 vote
Thank you Tom. I've recently gotten more information regarding the home. There was a reverse mortgage before my grandfather passed away. The house was for sale, but didn't sell and my father was faced with foreclosure. My father actually did a "Deed in Lieu" rather than beginning the foreclosure process. The bank accepted, however, every time he contacts the reverse mortgage company, they say that he technically still owns the home, though his lawyer claims the estate is closed.

Anyway, it's a bit of a mystery right now. However, as far as I know, the died in lieu was signed a year ago, though the house only started showing up in searches as "pre-foreclosed" recently. I am now financially able to purchase the home and am trying to figure out what to do next. i am meeting with the family attorney in a week regarding the property. Thanks for your help!
Flag Thu Oct 4, 2012
De Vonte Wil…, Agent, East Point, GA
Wed Oct 3, 2012
Hello Nicole. You may have a chance at purchasing the property, however you MUST consult with an Attorney. In my experience some lenders will allow you to purchase the home, and then again--some lenders may not. If it is a short sale, the chances are very slim because relatives are not allowed to purchase the property when it is a short sale.

Again, consult an attorney.

I hope this answered your question! If you have any further questions, please feel free to contact me by the ways below.

Wishing you the best of luck,


De Vonte Williamson
Licensed Real Estate Salesperson
Proudly Serving Long Island
Coldwell Banker Residential
Direct:(631)638-6193
Mobile: (631)384-3695
cbmoves.com/DeVonte.Williamson
"I Stand Behind Getting You Results!
1 vote
Michael Buck…, , Massapequa, NY
Wed Oct 3, 2012
Family members are prohibited from buying the home in the event of a foreclosure or short sale. However, the executor of the estate can contact the bank that holds the mortgage and try to pay the past due amount along with any penalty. In that case the home would not be in foreclosure and you would be able to purchase it outright. Either way, you and your father should speak with an attorney. The faster you act on this the better.
Michael Buckley
Floyd Harbor Real Estate.
1 vote
Anna M Brocco, Agent, Williston Park, NY
Thu Oct 4, 2012
Before moving forward consult with an attorney who specializes in real estate; he/she can best advise....
0 votes
Robbie Vaughn, Agent, Mineola, NY
Thu Oct 4, 2012
Need more information, but you likely have several different options available to you. The longer you wait, the fewer options you may have. A consultation with an attorney may be necesssary. Good luck.
Web Reference:  http://www.bverealty.com
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