Questions about property that the bank has charged off?

4 Replies

Sorry if this is not the correct category, I wasn't 100% sure where to post this....

I am interested in purchasing a piece of property that was foreclosed on and the bank purchased it back at the foreclosure sale. I contacted the bank (it is amazing how difficult it is to talk to people there) and got lucky one time (out of many calls) and someone actually provided me with some information. I was told that the property was charged off by the bank. This was several months ago. Recently I started inquiring again, and found someone who is willing to help but they said they are waiting for authorization from the correct department before they can put me in touch with the right person etc etc etc...

From my research I know the bank (BOA) owns the property. They foreclosed on it, their name is on the property tax and there was no other recorded documents showing that it was sold or quit claimed to anyone else since the time that they took it back at the foreclosure sale. It would make sense that they charged it off as the physical building was destroyed by a hurricane (which is why the original owner stopped making payments and let it go) and the only thing that remains is the land.

It's incredibly frustrating how these banks will not cooperate with people who want to buy property from them that they obviously don't want to own. As is stands, the bank is not paying property tax, not paying association dues and has the liability of being the owner of the land.

My question, when it comes to "charged off" properties is there any information that someone here could provide that is familar with how the bank handles the properties, specifically in regards to what I need to do to get in touch with the right person so I can make them an offer to buy the land from them. THanks!

Unfortunately you cannot make them an offer directly. Their usual protocol is to list it with an REO agent. What you should do is find out who their REO agent is; then contact that agent and tell them that you're following a Bank owned property that's about to be listed with them and you're ready to make an offer. Advice them to call you once it is in their system.

Now if this property had an FHA mortgage on it, the bank will turn the property over to HUD which will then be auctioned off, first to owner occupied buyers before opening the bidding to investors (non-owner occupied) after a set number of days.

@Jonathan Marcus , good advice. If it is vacant land now, I don't know if it can be conveyed to HUD. I think the lender may have to keep it. Considering this is BOA it is going to be virtually impossible to buy it directly from the bank.

The rep at BOA said that they do NOT own the property... that they just serviced the loan for the "investor". When the property goes to foreclosure it goes back to the investor.

According to the original mortgage filed with the previous owner for this property, it was with Countrywide Home Loans INC. in 2004. In 2009 they were foreclosed on by BAC Home Loans Servicing, L.P. f/k/a Countrywide Home Loans Servicing LP.

Bank of America purchased Countrywide.... so who in the heck is the original investor? Wouldn't it have to be Countrywide, but when the BOA rep was asked that they said "there is no more Countrywide, BOA bought them years ago." But they also say BOA doesn't own the property, the original investor does... Who is on first? around and around we go... this is ridiculous.

Can anyone make sense of this? I feel like it is some type of riddle.

Usually that is the case. BOA maybe servicing the mortgage on behalf of an investor like a Hedge Fund or Pension Fund, etc...but BOA should still have the power of direction/disposition. Did you ask what their process is after they take back a property? From my experience the only time you're able to make an offer direct to the Bank for an REO is when you're buying in bulk. Otherwise they will list it with their REO agent.

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