Buying Property Pre-Foreclosure Stage

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Being new at this, I have a question regarding the process of buying a house from a seller who is in the Pre-Foreclosure stage. Once I have a property under contract from a seller, and have the buyer. Buyer aside for the moment, at closing, does the Title Company issue 1 check to the mortgage company for outstanding loan amount, 1 check to the seller for any "over and above" amount in the sellers "agreed upon price" with me?

I would greatly appreciate everyone’s insight into the process. Thank you!

Originally posted by @Dan Olin :

Being new at this, I have a question regarding the process of buying a house from a seller who is in the Pre-Foreclosure stage. Once I have a property under contract from a seller, and have the buyer. Buyer aside for the moment, at closing, does the Title Company issue 1 check to the mortgage company for outstanding loan amount, 1 check to the seller for any “over and above” amount in the sellers “agreed upon price” with me? 

I would greatly appreciate everyone’s insight into the process. Thank you!

It depends.

It sounds like you might be talking about wholesaling a property that is in pre-foreclosure. If all you are doing is bringing the loan current, the amount to cure the default is wired to the bank.

It's unclear if you realize that the "outstanding loan amount" could mean "outstanding principal", "outstanding principal plus missed payments (called "arrears"),  "outstanding principal", plus "arrears" plus legal fees plus unpaid taxes etc.

Depending on your scenario, a variety of solutions are available but time is not your friend. Foreclosure follows a timeline and you have different pressures and options depending on what choices the bank makes.

Wholesaling a pre-foreclosure requires planning ahead and knowing your options in case scenario.

As you can see, it is a bit of an advanced technique so it requires a lengthy explanation. Too long for here, to explain everything, so you can go to my Profile https://www.biggerpockets.com/users/MikeM500 and follow the link, email me or PM me. I can help you there with more detail.