I am not experienced with foreclosure properties. I have inquired about a property that had a sign on it. I called the number and got the lender. I then proceeded to contact the owner. He no longer lives there and "gave it back to the bank" He never signed anything and after talking to the lender it is still in his name and foreclosure date is set at sometime in the future. The owner mentioned to me that the bank already put different locks on it. Can they do this? The lender gave me a package to fill out for short sale. I think they were confused as I would be the one wanting to buy and not sell. It looks like the form is for the owner. Should I still be negotiating with the owner since its still in his name or talk to the lender? The lender is sending me an amount that is to be due to pay the loan off in full if we settled in 30 days. Where would one go from here to see if this could be a potential deal? Do you wait till short sale or try negotiating with the bank now?
Until the sheriff sale (trustee sale, or whatever it is in you state) actually happens, its still owned by the owner. After the sale its owned by either the foreclosing lender (no bids) or the winner (bids). Even then, there's a process for transferring ownership, redemption rights and other steps that mean the transfer isn't necessarily immediate.
But in this case, its still owned by the owner, not the lender. If you can buy it for a high enough price to allow the lender to be paid in full, its easy. Just a normal transaction with the owner. If that price is too high, a short sale would come into play. The owner has to be involved in that process and has to convince the lender to accept the short. That's the "short sale package" you were provided. Lots of discussion here about short sales.
If an owner abandons a property, the lender has the right to preserve their collateral. That can include changing locks, boarding the place up, winterizing, or other stops to protect the property.
Jon Holdman, Flying Phoenix LLC
Best think to do is walk away from the headache.
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