Profile picture for skinman218

if a home is in forclosure, is it possible to to step in and take over the existing mortgage.

without going through the traditional buying process? i have heard of this but it sounds too good to be true.
  • November 25 2010 - Huntington
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Answers (7)

most (99.9) loans are not assumable,
  • June 25 2011
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Profile picture for Pacita Dimacali
If the property is in pre-foreclosure, and the mortgage is a VA or FHA, yu can initiate a discussion with the seller about selling the property to you and have you assume the mortgage. That will still be a selling process egardless of whether you use an agent or not.

See: Assumable Home Loan

Just know that you will have to be preapproved to assume that loan, and as such you will need to go through the motions of providing information about your ability to close escrow and your credti-worthiness.

If the seller gives you a quit claim deed -- that doesn't free the seller from the loan obligations. So that won't help him (but it will surely benefit you).

If the pre-foreclosure involves a tax certificate, you may want to buy that certificate, with the understanding that there s a recission period during which the seller could reclaim his property once he settles some obligations.

Best that you engage a realtor to guide you through the processes. You may be better off finding foreclosed homes that are actively offered for sale. At least you the peace of mind that the foreclosiing banks who are selling the properties can/will deliver clear title

  • June 24 2011
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Profile picture for Andy Zoda
Loan assumptions are rarely done any more.  I've been in the real estate business for over 11 years and I haven't been involved in any way with one.

You could go out and seek a loan on your own that would be for a high enough amount to pay off the current owner's mortgage (plus interest and penalties).  You would also probably need to pay most of the seller's normal expenses in selling a home as it's unlikely that someone who is already in default on their mortgage would have the ability or inclination to pay for things such as title insurance, a survey, catching up on accrued property taxes, etc.

If it wouldn't be worth it or possible to purchase the home with a new mortgage at a high enough amount to pay off the old one, then you'd need to see if the seller would be interested in cooperating with you in trying to get a short sale approved from their lender.  A short sale is where the mortgage holder agrees to release their mortgage at an amount less than the full amount they're owed.  In a short sale, you would need to have enough cash or financing to complete the purchase.

Feel free to call or text me at [phone removed by Zillow moderator] if you have any further questions.
  • June 24 2011
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A mortgage is a contract between a lender and a buyer.  To assume a mortgage, you must be approved by the lender as a new party to the contract.  Lenders today are very picky about who they will lend money to so you would have to go through the financial scrutinizing required by all lenders.

Since interest rates have dropped so much in the past year, chances are the interest rate on the current mortgage is  higher than if you got a new mortgage of your own.  The lower interest rates = lower monthly payments so why would you even want to step in and take over an existing mortgage with a higher interest rate?

Also, by going through the traditional buying process and title work, you will make sure there are no old liens on the house that you could get stuck with and have to pay. Taxes, repairs and so on can be liens... you should NOT take on another person's liens.  Just wait for the foreclosure.  Then buy the house free and clear yourself.

  • November 26 2010
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You might cure the default.  Depends how far gone it is.
  • November 25 2010
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no. You would have to buy it from the owner, in what would probably be a short sale. clueless answer below me...buying "subject to" means leaving the existing loan in place, which isn't going to fly if that loan is in foreclosure...
  • November 25 2010
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That's called "subject-to".  Here's an article about it:

http://www.wendypatton.com/articles/lease-options-and-subject-tos-getting-the-deed
  • November 25 2010
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