Posted by Linda Juenger on 7/18/13 12:37am
Msg #477248

Question.. A friends son is trying to buy a foreclosure

from the VA. They found a lien against the property. Does anyone know if the VA will just pay the lien off or will they take they good ole time and try to get the previous owner to pay it? What kind of time frame is he looking at here as far as closing on this? He has a date to close of 7/25, but the lien showed up today. I haven't got a clue on what to tell the mom. She is upset.

Reply by 101livescan on 7/18/13 1:15am
Msg #477251

Is there a broker involved, I would ask him what his experience is, or the title company. These VA purchase and sales do take longer to get to he signing table than conventional loans.

Reply by Doris_CO on 7/18/13 2:17am
Msg #477256

Just because an unreleased lien has been discovered doesn't necessarily mean the lien hasn't been paid. It could just be a case of the lien being paid but when the paid mortgage was sent to be released there was a problem with the process & it wasn't completed.

Reply by Linda_H/FL on 7/18/13 9:04am
Msg #477265

Can't stress enough the importance of a good title search

and great title company and possible attorney representation when buying foreclosed properties. Far too much can crop up in the chain of title that he can get stuck with if prior liens were not foreclosed out properly. Better to find them now than later, and find out he took title to the property subject to these liens.

If they've already been paid, or if they've been properly foreclosed out, they're going to need to be released. This may be a non-issue...may be a critical issue.

JMO

Reply by 101livescan on 7/18/13 9:08am
Msg #477267

Re: Can't stress enough the importance of a good title search

Amen to that, Linda. If I had hired an attorney before I bought this 40 acres, there are a couple of issues I would have headed off, but now have to live with, and hopefully will all come out in the wash.

When you buy a piece of property any where, there can be legal issues and it's good to know up front what they are so you can avoid them or settle them in advance of buying into them.

Reply by MW/VA on 7/18/13 9:28am
Msg #477273

My niece bought a foreclosure in Phoenix. The key to

buying foreclosures or shortsales is patience & trying not to react to every glitch along the way. It will happen in it's own time.
BTW, everyone purchases owner's title insurance when they buy a foreclosure, so any lien's against the property are not cause for worry.

Reply by Linda_H/FL on 7/18/13 10:52am
Msg #477289

Not necessarily true

Owner's Title Insurance - in most if not all states - is optional (CT comes to mind) - although it is wise to purchase it to avoid any issues, everyone doesn't do it because it's expensive. In CT it's a Buyer's expense, which many don't want to fork over because the premium is based on appraised, or sales, value, not the mortgage amount. That can get really pricey. In Florida, it's a Seller's expense and the Seller is required to provide an owner's policy to the buyer. Buyer pays for mortgagee coverage only.

Reply by Jack/AL on 7/18/13 11:04am
Msg #477294

Re: Not necessarily true

It is not required in a cash purchase (at least not in most states, perhaps all), but I consider it a very good idea to obtain it. In a foreclosure, there has already been instability in the ownership, and often there are facts unknown to the buyers and other participants in the tarnsaction. Insurance is there as a safety feature, in this case to protect the buyers, so why not get it?

Reply by Linda_H/FL on 7/18/13 11:10am
Msg #477300

I agree - they SHOULD...doesn't mean they all do

that's all I was saying. Many buy these just to flip it quick - at as little cost as possible.

Don't ask me to figure out what's in buyers' minds when they go into these deals. But they do what they do.

Reply by MW/VA on 7/18/13 11:31am
Msg #477307

I can't imagine someone purchasing a foreclosure without

owner's title insurance to cover them from any hidden clouds that may be on title.

Reply by SharonMN on 7/18/13 11:28am
Msg #477305

Re: Not necessarily true

Owner's insurance. This is something I will never understand. Sometimes the same people who happily pay $50 for an extended warranty on a $200 TV don't have insurance for the things with the potential for the greatest losses. I bought owner's insurance because I definitely want protection if a previous owner or their bank, relative, ex-wife, heir, or business partner shows up someday and claims they own my house!

Reply by Linda_H/FL on 7/18/13 11:37am
Msg #477310

Sharon, I remember one in Connecticut where exactly

that happened - our clients bought a home, were in it for a number of years - suddenly a relative of the seller comes knocking on their door stating they have an interest in the property. Thankfully there was a paper trail that no, this person did not - this person had delusions but no interest in the property.

Another thing we had going on in CT was the Paugussett Indians claiming ownership of large areas of land in and around Fairfield County. They claimed it to be tribal property. Many homeowners were in a tizzy over that. After this started, Owners' Title Insurance was strongly recommended to all buyers, and any policies issued in Fairfield County had endorsements added to them as they required additional searching and clearing. It was a mess.

I agree - it's one of the best investments they can make - but sometimes they don't - go figure.

Reply by SharonMN on 7/18/13 11:02am
Msg #477293

>>I haven't got a clue on what to tell the mom. She is upset.

I think neither you nor the mom needs to tell anyone anything. The buyer should work with his agent, lawyer, and title company to resolve the problem. I presume the son is an adult and this is none of your business or the mom's unless the son asks for advice, in which case a simple, "Wow, that sounds like a mess! Hope it turns out OK." will suffice. It is certainly not something the mom needs to manage or get upset about (unless son is still living at home and she wants to get rid of him!)

Reply by Linda Juenger on 7/18/13 2:48pm
Msg #477340

Thanks for all the replys. I told her what my role in any

real estate transaction is and she understood. I am the end of the process, not an attorney or RE agent and can't give advice. She understood. I advised her to follow TC's (which by the way is First American) advice or the advice of an attorney. She just sent me a msg stating that the VA is wanting him to do a QCD instead of a warranty deed, but Title won't go along with that. I think she's getting good advice. I also told her it would probably be in his best interest to purchase the Owners Ins. I know I would in this case.
My son is also in the process of buying his 1st house and he's buying it For Sale By Owner. He got to pick the TC and I directed him to one I know and trust in our area and have worked for many times. So far, so good. He's getting a Direct Loan through USDA for low income. He is out of college, working full time but not making a whole lot at the moment. His credit is great (they were very surprised cause they don't see that often). He's been living at home with us and very anxious to get out. The rent around here is high due to a lot of military folks in and out. His house payment along with taxes and ins is going to be 1/2 of what rent would be. I'm proud of him. He's our last out of the house and it makes me sad. Empty nesters here we come. I already have plans for his room. LOL My craft, sewing, ancestory room.

Reply by BevTX on 7/18/13 5:20pm
Msg #477355

In Texas, there will be title insurance on the property or mortgage company will not finance. Taxes are also prorated. I'm only licensed in Texas, so I don't know what the laws are anywhere else.