All Forum Posts by: Kevin Trumbull

I'll try to be brief, and I'm not looking for legal advice, more of a 'what would you do in this situation' thing.

I put an offer on a new primary residence in Oregon in November (I live in California currently), which is a foreclosure owned by a bank.  Title company does a search, finds there is still a 2nd lien on the property.  After some digging, turns out the bank didn't foreclose properly, they failed to notify the 2nd lienholder, they said they'll need to do a 'strict foreclosure' and that will take 60-90 days.  OK fine, that sucks but we really want the house.

My realtor submits the contract extension, the bank comes back to say they won't extend the contract, they asked me to cancel the contract while they work on clearing the title, and they said I could resubmit my offer (no guarantee they'll accept it then).

My realtor looks over the contract in detail and he doesn't think the bank can actually back out of the contract, and he said I might want to talk to a lawyer to see what options I may have.

We really really want this house, and are willing to stay under contract for as long as it takes, but the bank seems to want to back out.  Nobody involved can understand why the bank would want to back out of the contract (a guaranteed sale)... only thing I can think of is they no longer like my offer and want to try to get something better.

Has anybody run in to this situation before?  Anybody have any advice?  I don't want to incur a ton of legal fees just to acquire this house.  What outcome might I expect from the legal route?  All I want is to buy the house at the price/terms we negotiated.

I should clarify for others that this is a straight REO, not a pre-foreclosure.

looking for recommendations on a real estate agent in Eugene, OR, does not necessarily need to be investor-friendly, looking to put an offer in on a foreclosure. I am doing this from California, looking to purchase a primary residence.

@Steve Francis be aware that some lenders do not allow you to fund the DP with a HELOC, and may require that you season the DP funds in a checking account for a couple of months. Make sure you have a discussion with your lender ahead of time so you don't run in to any nasty surprises days before closing. :)

@Grant Berthold Have you considered a HELOC instead? For example, some banks will go as high as 90% LTV on a HELOC, some even higher.

You want to talk to a conventional lender about the cash out refi before you put in your offer on a property. You want to get pre-approval, and make sure you understand their LTV and Seasoning requirements, and factor those in to your deal analysis.

@James Cloman This may have been mentioned, but once your credit score rebounds from paying off the temporary unsecured debt, find a lender that will do a rate and term refinance with no closing costs to help lower your long-term interest rate.

Your lender is correct.  My plan for this scenario was to get a blanket loan from a commercial or portfolio lender on the 4 properties, which should reset your FNMA loans and you can start over.

Is that refi on LTC or ARV? Sounds like it's a commercial product?

Congrats @Cliff Harrison, sounds like you got a few extras in your deal. :)