Scary Times to Buy Foreclosures

I just saw this articled posted on Housing Watch – Evicted Family Breaks Into Foreclosed Home.  A trust deed sale buyer bought it at the court house steps, went through a lengthy eviction with this family, spent $40,000 upgrading the house and now the family moves back in a week before he was going to close escrow.

This makes me sick.  The fraudulent family originally paid $500,000 for the house, refinanced it up to $880,000, stopped making payments and feels that they are entitled to live in the house for free?

As an investor it is extremely scary to be buying forelcosed properties if this kind of stuff can go on.  The company that purchased this property did so at the trust deed sale, when you buy properties there you do not get title insurance.  So if the judge does reverse the foreclosure they are going to have to sue the bank and try to collect.

When we buy, we always get title insurance, but only up to our purchase price, so we typically would be out all carrying costs, remodeling expenses and potential profit.

How can anything think what this family is doing is right?  How is it good for America?

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4 Responses to “ Scary Times to Buy Foreclosures ”

  1. Mike Z says:

    Wow if this becomes a common practice instead of a one off crazy story watch out. Prices are going to fall and more banks are going to go out of business and lending will dry up and ugliness will continue.
    We need to clear the market of all the backlog and this type of stuff is not helping one bit

  2. […] A Word Of Caution For Foreclosure Investors Posted by: rein | Category: Flipping Houses, Real Estate Investing, Rehabbing Houses, Reos, Short Sales […]

  3. Molli King says:

    I agree.. There are times we afraid to investment that’s why we should Find a Motivated Seller and must able to know the Basics of Real Estate Contracts – Never read the find print? It’s essential – so you don’t get scammed!

  4. Mark in Fl says:

    What a nightmare.

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