Can you stop foreclosure in a Non-Judicial State?

7 Replies

Say a homeowner who just received a foreclosure notice that their property will be sold at auction (not a notice of default) ,called me wanting to sell their property fast & for cash. 

I've heard that once they've received the foreclosure notice it's too late, but I've also heard you can have the homeowner contact their bank or attorney to try and negotiate the sale between myself and the distressed homeowner?

Can anyone walk me through the steps?

After the sale date is set, with a specific dollar amount, there's generally no "negotiation with the bank", but you simply pay them in full prior to the auction.  If necessary, then you can contact the bank or their attorneys if you need to delay the sale, and can convince you have a solid asle.

@Wayne Brooks  Thanks! So the buyers would be the ones doing all the negotiating with the bank or would that be the sellers responsibility?

Also, would if be ok to agree on a price & have both parties sign a contract so that the seller would have something of validity to show the banks? Maybe include a clause that makes it subject to the banks approval or is this already implied?

@Stanley Okazaki  

If you're paying the loan in full for cash, you can easily close in just a few days if the seller has an existing survey and you use a responsive escrow officer. You don't need bank approval unless you're shorting the loan, in which case the property will almost certainly go to foreclosure long before you would get approval for a short-sale.

@Guy Gimenez  This helped a lot, thanks! Would you mind keeping in touch with me? I'm sure I'll have more questions down the road and would greatly appreciate some help?

Stanley, after a notice is given, federal law kicks in as to banking and consumer concerns of someone attempting to stop foreclosure or helping a homeowner. Under those circumstances it can get touchy, in this case the owner contacted you initially, that keeps you out of the deep end but you can still screw up and drown, I suggest you get assistance.

Guy is a licensee in Texas, not endorsing his services, he may not want to get involved, but get with him to guide you as a licensee. Since it's a slam dunk as the buyer and seller are already together, I doubt if he or any other broker wouldn't cut you some slack on the fees charged (LOL). You can always ask. But, I suggest you get assistance!!! Good luck :)

If the notice of sale has been published and the sale is within 37 days, there is no requirement by the lender to postpone a sale for short sale consideration (Assuming its a short sale). Outside of 37 days (Assuming its a short sale) the lender/bank/servicer is required by statute to postpone the sale to review the purchase offer. There is no obligation to accept the offer or even counter.

Additionally, if the foreclosure is for non payment, the borrower may reinstate the loan up to five days from the date of the sale by bringing the loan current and paying all foreclosure costs. That would start the clock ticking again and remove the foreclosure giving parties time to to a traditional purchase/sale.

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