Foreclosure Financeing

If you are looking at properties going into foreclosure they usually need work, and banks almost never make loans on these types of houses.  That’s the down side, on the up side most people losing there home really don’t care what happens to the loan, so if you make up the back payments you can just leave the loan on the property and you don’t have to worry about financing.

I have done this with many dozens of properties and I have had problems 2 times.  Both times it was because the interest rate on the loan was less than half what the current interest rate was so the banks really wanted to get paid off.

The way they find out about it is when you put the property in your name, you have to buy insurance and when you do that they will contact the lender.  If I am thinking about keeping the property for more than a couple years then I always go ahead and put the insurance in my name and cancel the previous owners insurance, then I just deal with the lender.  

Most banks don’t pick up on the fact that the name on the insurance has changed but sometimes they do figure out that the payments are now coming from someone new.

If they start complaining too much I tell them I am managing the property. Which is the truth – I am managing it for myself. I even paid $6.00 and got a checking account that says property manager on it.  When I started doing that almost all the problems stopped.