Foreclosure Shopping ? - Consider This

A recent ruling by a Massachusetts court decided that a homeowner who had purchased a foreclosed home did not have legal ownership of the property and consequently could not resell it. The reason for the ruling was that the bank who sold the property did not properly process the title when they foreclosed on it. Lenders and foreclosure mills who have engaged in robo-signing in order to push foreclosures through judicial systems now face another round of potential liability from this 2nd tier damage.

This decision by the Supreme Judicial Court now casts a cloud over legal ownership to any property where banks may have not properly conveyed clear and marketable title when they foreclosed.

According to an article in the Wall Street Journal about the case, "the problem has gained attention nationwide because of the banks use of robo-signing and other dubious practices that may have broken chains of title in foreclosures." Any unwitting 3rd party who eventually purchased a foreclosed home with a tainted title could be at risk of proving that a clear chain of title exists before selling or refinancing the property. What's scary is that most people don't even know they have this problem until they decide to sell or refinance.

George Sinacori

Tricks & Traps of Foreclosures - Buyer Beware!

 Considering buying a foreclosure? Here are some tips that may help. When dealing with a bank for an REO (Real Estate Owned) property expect tricks & traps at every junction. Here are just a few that you'll want be aware of.

- "AS IS WHERE IS" - Banks sell properties in a strictly as is condition. If you look at a foreclosure and it needs substantial work to make it livable, don't expect that the bank will make these repairs prior to closing. Anything short of an environmental or health hazard will ultimately be the buyers responsibility. Make sure your inspections are thorough even if it costs a bit more initially.

- "Real Estate Disclosures" - There aren't any! The bank has never seen or lived in the property and has zero knowledge of the history, prior or existing defects, or the surrounding areas. typically a Sellers Disclosure is obtained by a buyer prior to submitting an offer. Don't expect any from a bank.

- "Contract Terms" will change - Your initial offer may be accepted verbally however, soon thereafter you will receive a whole new set of documents & addendum's to review and sign ASAP if you expect the contract to move forward. You'll find that many of the terms, times and conditions are very different than what you thought was accepted. The only thing that is accepted is "price". All other conditions will be incorporated in the bank or investors contract. Take it or leave it.

- "Escrow Deposit"- You will likely be required to work with the banks chosen escrow and Title Insurance company. They will rush you for your deposits and afterward take their time on processing the required signatures and meeting deadlines. Typically they are slow and unorganized "Foreclosure Mills".



Have realistic expectations. Work with a Broker who is familiar with the process and potential complications. Call 561-306-6736 or email directly with any questions about buying a foreclosure.