REO on hubzu - means no liens ?

Question

Did i understand right that if a property is REO,

that means there are no liens when sold to highest bidder?

Thanks!

Matt Overbee · Answer

@Marci Stein

I forgot to mention to make sure to have your attorney review the contract prior to signing it and sending it to the seller. And I think you only get like 48 hrs if I remember correctly.

There are no contingencies in their REO contracts, this includes financing and inspection contigencies. That's what I mean by a more difficult transaction than most.

Matt Overbee · Answer

@Steve Garner

Sorry Steve, I don't have much experience buying Short Sales from them, that's a slightly different animal, especially if there's a 2nd lien holder involved. That just adds more complexity into an already difficult process that Hubzu has.

@Marci Stein

You're welcome. Ocwen is a mortgage servicer, I believe Hubzu used to be a subsidiary business of Ocwen and was spunoff or something like that. Long story short, Ocwen basically sells all of it's REO's it forecloses on through Hubzu and their auction platform, instead of just selling them as a basic REO on an MLS like most banks. For those REO auctions they will sell with clear title and resolve liens prior to closing.

The reason I would still say it depends on the seller (and the attorney should confirm that in the contract), is because Hubzu is trying to branch out and become a selling platform for others as well, so every auction on there may not be by Ocwen and may have slightly different terms.

Seems like most REOs they are selling today are by Ocwen though. I think they are struggling getting others to use them to sell property since they have quite a bad reputation. It is a much more difficult transaction than your standard REO purchase off the MLS.

Marci Stein · Answer

Thanks fro this good info Matt-so they will clear up any title issues at closing no cost to buyer?

BTW--what is Ocwen?

Steve Garner · Answer

Any additional info on Hubzu is appreciated.  I had an offer on a short sale since September.  It went to Hubzu and my offer was the highest bid.  I was told that I had won the bid.  6 weeks later we are still waiting on the second lien holder to approve the deal.

IF ANYONE HAS SUGGESTIONS OR RECOMMENDATIONS THEY ARE GREATLY APPRECIATED!!!!!

Matt Overbee · Answer

Hi @Marci Stein

They will generally issue marketable/clear title at closing for the REO's that they sell for Ocwen, but there might be liens on the property prior to closing. I just closed on my house with them in October that was an REO, and there was a $2500 water bill lien we found that they had to clear.

This all depends on the seller and contract though, so make sure you have a good attorney and I would pay the extra money at closing to choose your own closing company. I've read about many horror stories by some who used Hubzu's closing company since they offer it as a cost savings, and those people reported having a lot of difficulty working with the overseas representatives that will then handle that closing.