Foreclosure Buyers Beware

 Posted by at 7:41 am
Jan 222013
 

There are still a number of buyers who seem determined to buy a foreclosure. My personal rule is “you need a strong stomach, a lot of patience and courage, a good wad of cash, and an attorney on retainer.” I have yet another example of why that’s my rule.

The Bangor Daily News recently reported an interesting tale of a foreclosure purchase made in 2009. The original owners are claiming the foreclosure process was flawed–therefore they still own the property and have refused to leave the home. The “new” owners are paying the property taxes but haven’t had access to the property they “purchased” for over three years. You can read the details for yourself, including the fact that the case is now before the Maine Supreme Court. We can debate the validity of the original owners’ claim, but not the reality they made it and the court is apparently taking it seriously.

This particular case happens to be a tax foreclosure, but bank foreclosures are no less risky. Buyers love to point out that foreclosures can be a heck of a deal and think they “can’t lose.” I suspect these buyers would not agree. Even if the court eventually declares them the rightful owner, they are left with a huge legal bill and the need to evict the original owners.

 

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There Might Be A Reason…

 Posted by at 7:16 am
Jan 022013
 

Let me start with a disclaimer: I am not in any way, shape, or form a reverse mortgage expert. For that matter, I’m not sure I know anyone who is… but with that, let me share a news story with you. The Bangor Daily News recently ran an article Seldom-used financial tool helps seniors purchase new homes without mortgage payments. I will tell you that the tool involved is a “reverse mortgage for purchase” and the story involves a woman in Westbrook who successfully used one.

The article notes that while these loans have been available since 2009, there haven’t been very many issued. There might be a reason for that. Understanding the concept will make most people’s head hurt and I don’t know too many lenders who are familiar with the program. If you are over 62 years old and would like to downsize–it will be worth reading the article and doing some research. Just use some caution and consider all of the financial implications.

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