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bank owned homes

THERE IS A HOME LISTED AS BANK OWNED FOR 200K THE SELLERS AGENT TOLD MY REALTOR THAT THE SELLER OWES THE BANK 18K AND DOESNT WANT TO PAY....IF THEY DONT THE BUYER WOULD BE LIABLE FOR THE 18K...HUH?...IT SEEMS AS THOUGH EVERY OTHER HOME IS A SHORT SELL OR BANK OWNED BUT THE BANKS DONT SEEM TOO THRILLED TO GET RID OF IN THIS SO CALLED BUYERS MARKET.......CAN ANYONE ELABORATE?
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February 06 2009 - Irvington
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Answers (4)

Unless you are going to pay cash for the property, financing could be an issue. A lender will require 1st lien position and the insurance company would have to subordinate. This will really throw off your combined loan to value (CLTV) and therefore financing may not be possible. Not to mention that you may not be able to get insurance on the property if there is outstanding claims.

Why doesn't the asking price include this lien? You should demand that the seller provide clear title, free of encumbrances. Will the comparables support the added 18K? If not, keep looking.
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February 17 2009
Profile picture for datruth41
mike, its listed as bank owned so i dont understand the 18k stipulation...sounds as though the the ins co is owed 18k and the bank doesnt want to pay, instead workout a deal with a buyer to pay it...does that make sense?...i really like the house maybe ill keep my eyes on it cuz its been on the market awhile
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February 07 2009
Is this a bank owned property or a short sale property? If it's a short sale, the homeowner still is in possession of the property. If it is bank owned, the lender is the owner of the property.

Usually with bank owned properties any debts attached to the property is taken care of by the lender. Otherwise it would be difficult to obtain a clean title and of course title insurance.

If it were me, I would opt not to purchase a property that had an encumbrance like you have described. If I were to purchase the home, I would pay a title company to make sure there were no other unusual liens attached to the property- which if you were the buyer, you would be responsible for those liens.
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February 07 2009
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HERES THE LATEST: THE SELLER OWES THE INS CO 18K...ALONG WITH THE OFFER I HAVE TO AGREE TO PAY 18K TO THE INS. CO AT A RATE OF 100$ A MONTH TIL ITS PAID OFF, THE HOUSE IS EMPTY AND HAS BEEN ON THE MARKET FOR 8MOS...SHOULD RUN AND DONT LOOK BACK OR CAN AN EXPERIENCED EBA WORK SOMETHING OUT
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February 07 2009
 
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