Investor · Round Lake, IL · Member since 2015 · 41 posts · 17 votes
I found a vacant house and called the owner. She said she gave it back to back to the bank in lieu of foreclosure. I looked up the bank and they went bankrupt and are no longer in business.
What happens to an REO house if a bank goes out of business? Does it go to probate? Does the state take it over?
Borrowers say all kinds of things that are inaccurate or that they don't understand. Is there a recorded deed from the borrower to the bank? If not, for your purposes she's still the owner. Did the borrower file BK? Definitely check on that. I'd not look for bank info until you are sure who the owner is.
If you want to send me the address, I'll look it up and see what my data says.
if the bank went bankrupt there's a fair chance another lender acquired their assets.
Start by Googling the bankrupt bank name with a search such as "who bought x bank" or "x bank bankruptcy". You'll need to read through the information and documents that appear and then start looking up companies or people mentioned in the found information.
You can also look up the trustee that's listed in the deed and call them too.
As a last resort your state Secretary of State or comptroller should have an operating unit that works in cooperation with the FDIC or other federal agencies that oversee bank closures.
Borrowers say all kinds of things that are inaccurate or that they don't understand. Is there a recorded deed from the borrower to the bank? If not, for your purposes she's still the owner. Did the borrower file BK? Definitely check on that. I'd not look for bank info until you are sure who the owner is.
If you want to send me the address, I'll look it up and see what my data says.
So let's say my records say that she is in fact still the owner. Do I try to convince her to sell to me anyways? She may be blissfully naive and tell me to go away.
So let's say my records say that she is in fact still the owner. Do I try to convince her to sell to me anyways? She may be blissfully naive and tell me to go away.
Really what do you have to lose by asking? Exactly, nothing so ask.
If she isn't interested then offer her $500-1,000 to execute a quit claim deed but before you accept it make sure you've checked title and know what obligations you'll be assuming.
So let's say my records say that she is in fact still the owner. Do I try to convince her to sell to me anyways? She may be blissfully naive and tell me to go away.
It appears the borrower still owns the property. She filed Ch. 13 BK in 2009. She paid her mortgage for a couple years but did not adhere to her plan. The lender was able to get the stay lived in order to proceed with foreclosure in 2011. In 2011, her Ch. 13 converted to Ch. 7 and was discharged. I do not have access to recorded or court docs for your county. Unless you see a recorded doc that transfers the property from the borrower to the lender, it's safe (relatively) to assume she owns it. Is there a foreclosure case in your courts for this property?
Even if you buy it for a consideration (say $100) you have to figure out how to get the lien released. The lender's own BK filing will show if there is an active trustee and/or if the note was sold. The borrower's BK file seems incomplete and I can't tell if there is a 2nd mortgage (perhaps with a cram down). There is reference to the senior lien of approx $50K and reference to additional debt against the collateral for $45K. Without a title report I can't tell the total debt amount.
Borrower in BK doesn't complete repayment plan with vague memory/details of a "deed in lieu" to lender that went under and filed BK. Yum. Welcome to my world.