Buying Foreclosures

When Buying Foreclosures, Check if Bank Owns Mortgage with Tami Winbury.

There are many risks, albeit manageable ones, involved in buying foreclosures even short sale foreclosures. For instance, there is an off chance that the foreclosure was faulty and the buyer might have problems in terms of claiming ownership.Such problem is actually one of the things that the Supreme Judicial Court of Massachusetts is looking into. A lower court decision ruled that the residential property buyer never owned the home in question since the bank who sold it repossessed the home before it had the mortgage.Other states have been dealing with the same issue involving the buyer’s right when buying foreclosures from foreclosed auctions. More and more homebuyers and investors, especially those looking into fixing up distressed homes are becoming hesitant to do so since they are afraid of problems with the title. Of course, such fear may hobble the housing market, especially since majority of the homes for sale are either short sale or foreclosure.Last year, a scandal involving improper documentation done by loan servicers and banks erupted and triggered an investigation spanning all of the 50 states. Statewide, the number of foreclosures increased by 32 percent from 2009’s 9, 269 to 12, 233.Because of the broad implications, the Supreme Judicial Court has decided to bypass the intermediary panel and take on the appeal. Although the court can decide the fate of individuals buying foreclosures, which are later to be found faulty embroiled in such legal problems, it could also decide to leave the decision making to legislators.If the buyer was not able to purchase title insurance, things can even get from bad to worse. The latest case could also create trust issues involving bundled mortgages as well as securities sold to investors. In the past, mortgage-bond investors have claimed that there are banks overstate borrower’s income, inflate appraisals and engage in unscrupulous lending practices.

Read more: When Buying Foreclosures, Check if Bank Owns Mortgage | Foreclosure Newshttp://www.eforeclosuremagazine.com/foreclosure-market/buying-foreclosures-bank-mortgage#ixzz1CcqxtSnw