lots of problems trying to buy foreclosured home

What do you want to know about manufactured homes? The worlds greatest collection of expert advice on buying, installing, maintaining and repairing manufactured homes.



Post Reply
linshow
Posts: 1
Joined: Sat Jan 22, 2011 8:28 am

lots of problems trying to buy foreclosured home

Post by linshow » Sat Jan 22, 2011 8:50 am

Hi and thank you for your website, it's a great resource:)
I signed a purchase agreement with Freddie Mac's Realtor on a foreclosed manufactured home and it's also for the lot that the home is placed on. The home sits on a concrete slab, cement blocks and is anchored down with an attached garage. The home is located in Minnesota. Also, the house has some problems that I'll fix but I've agreed to the "as is," clause and wish to move on with the process of purchasing it.
The problem I'm running into is after being told "this is a done deal," I'm hearing that Freddie Mac wants me to sign an additional paper stating that I understand that there may not be a "clear title?" First off I can't believe they could sell anything without a clear title, but the realtor is telling me that Freddie Mac just doesn't know that the title was surrendered to the state of Minnesota (per law by foreclosure?) and once they are made aware they will not require me to sign this paper.
Well, now I'm finding out that the previous owner filed a lawsuit 3 months ago against Freddie Mac, the lending bank and the DOT! I can not figure out why the DOT but I'm thinking it has to do with the house not being considered "real estate?" and therefore lending problems? Lots of things going on here and I really do want this house for many reasons but am really getting scared that if I go ahead I'll end up losing everything over some lawsuit. The previous owners no longer have any right to redemption (time passed) and the home has always been taxed as "real Estate," and I think should be considered part of the property, but I can't find any information to help me with this. Any, comments, info you can give me might help my anxiety. I'm thinking the title closing would bring this all out and Freddie Mac would have to fix it, but also that this could take a long time to get resolved before "it's a done deal." Appreciate any advise you might have or sites I could visit for information. Thanks.

rmurray
Posts: 1086
Joined: Thu May 25, 2006 6:49 pm

Re: lots of problems trying to buy foreclosured home

Post by rmurray » Sun Jan 23, 2011 12:08 am

You are right to seek advise...The clear title might well refer to the manufactured home title or the whole ownership instrument. This is a question you should get local legal advise about. Seek out an experienced local real estate attorney and invest a very few hundred dollars to get a good idea of your risk..You are right the title company may well object and refuse title insurance which would cause you problems with your mortgage. A good real estate attorney probably is familiar with title insurance companies in your state. Freddie Mac and Fannie Mae are involved in hundreds of lawsuits nationwide involving their right to actually foreclose. They HAVE lost a few of these suits which has driven vulture attorneys to sign on foreclosed clients who hope they will win and get a free house. What Freddie seems to be doing is sliding their risk to you, but only a good local attorney can explain your risk if any. Good Luck..

Is it really as cold in MN as they said on the news today -46???

David Oxhandler
Posts: 1459
Joined: Tue Oct 02, 2007 8:37 am

Re: lots of problems trying to buy foreclosured home

Post by David Oxhandler » Sun Jan 23, 2011 10:46 am

This is a fantastic time to be a home buyer. My local market prices have dropped back to where they were 20 years ago. While a new MH and land package will still cost in between 90-175 thousand, we have been purchasing homes on land in the 30 thousand range.

I have purchased several foreclosed manufactured home and land packages in the past year. The selling banks have insisted on changing the local customs involved in real estate transactions. They insist on:

seeing your money or approval for a loan before you can see the home

selling "as is" with no responsibility for condition or title

continuing to marketing the home until you close.

you being obligated once you sign but they accept no obligation.

closing in a far away city with a title company that handles millions of dollars of their transactions and has been released of legal and moral obligation to protect the buyer.

The bottom line - Even though they insist on changing the rules to favor themselves the prices they are forced to sell at makes it worth continuing to play the game. BUT you MUST protect your interest and practice "Due Diligence".

Hire a professional home inspector. Let him uncover every flaw and potential problem.

I have purchased a lot of homes and have a better idea than most of what to look for, when I view a home. Last year I had a great contract price on a home. The inspection uncovered "significant and dangerous mold" under the home.

Purchase your own title insurance from a local title company or real-estate attorney. That local closing agent will know local real-estate transaction customs and pitfalls.

I just purchased a beautiful doublewide and lot adjacent to the local premier retirement community. The bank insisted on using a title company 400 miles away. I let them know that I would purchase title insurance and sign closing papers at my favorite local title company.

Prior to closing the title clerk called to let me know that the county permit records indicated a permit had been pulled to construct the beautiful wood deck at the front door. Yet there had never been an inspection and the permit had expired.

The clerk explained that the instant the property transfer was recorded a red flag would go up at the building department and they would contact me to let me know that I needed to pay double permit fees to reactivate the permit and stand inspection... or demolish the existing deck.

The banks closing agent had no way of knowing about this as there was no lien or notice in the public records. Yet my local title company understands the workings of local government and routinely checks for outstanding permits.

Be prepared to walk away from the deal regardless of how much time you have invested.

The uninspected deck was not a huge problem for me. It was built to code. For a few hundred dollars, a trip downtown, and a meeting with the building inspector at the home, I was able to make the problem go away. BUT...What if the outstanding permit had been for an attached garage valued at thousands... that I might have to demolish?

Now is the best time in the past 20 years to buy an existing home. You must go through the process with eyes wide open. Assume nothing, and understand going in there is a good chance you may have to start over, more than once.
David Oxhandler
[email protected]

wendy
Posts: 4
Joined: Tue Jan 25, 2011 10:38 pm

Re: lots of problems trying to buy foreclosured home

Post by wendy » Tue Jan 25, 2011 10:58 pm

Good info!!
My daughter has an accepted bid on a fl. mobile (no land) that the owners "gave back to the bank" (being handled by "sun corp??) and allowed to be foreclosed on but it doesn't appear that it went through the normal auction foreclosure and I am concerned. She has been helped by a mobile home dealer who is evidently very reputable and who would be moving it for her. She has toured the mobile twice now and is very happy with it but she has only been given three days to get it inspected and the company she wants to hire is not available until the day full payment is required (this Thursday!). I am concerned after reading the above posts although they deal mostly with land and mobiles together?
What is the best way for her to proceed with due diligence and will she need title insurance on this? How should the payment be handled and will she have "closing" papers to sign that she would be able to have a lawyer look over?She wants to move it on to land she recently purchased in Marion County.
Any advice you can offer would be most welcome as I am beginning to panic.

rmurray
Posts: 1086
Joined: Thu May 25, 2006 6:49 pm

Re: lots of problems trying to buy foreclosured home

Post by rmurray » Tue Jan 25, 2011 11:38 pm

Completely different scenario..Repossessions are handled much differently than real estate foreclosures. Most important for her is that she is dealing with a licensed manufactured home dealer in Florida. That dealer is highly regulated and is bonded. Florida has a state administered fund for those that get burned by a licensed dealer. I MUST supply a clear title and if he fails to you have substantial recourse that would protect your investment. The home inspection deadline is a bit unusual but if there are other buyers involved she will have to decide to move forward or not..Send a private e-mail to David Oxhandler, the webmaster. He is based in Marion County and knows the local dealers very well..I am sure he would not mind helping in any way he can..He buys and sells homes in Marion County regularly.

Post Reply

Who is online

Users browsing this forum: No registered users and 51 guests