Upcoming Foreclosures

on a short sale property can a lender carry financing?

In dealing with a lender on a property that the present owner is about to lose the property to foreclosure, can a lender work with another buyer and let them put the new financing on the property? Just a transfer of the property to you and have you make payments on the property? How do you see this best to be done?

Public Comments

1. No you cannot just make payments on seller's existing loan You will need a new loan. Most loans are not assumable. You will make an offer to seller and their lender will have to approve offer. If it forecloses the short sale is dead. And the property will be listed for sale in a few months by the bank.
2. You still have to qualify for financing if you are buying a short sale, you may be able to finance through the same company but not by just assuming the debt.
3. In regards to: "can a lender work with another buyer and let them put the new financing on the property?" The seller still owns the property until it gets foreclosed on. With equity, the seller can sell to anyone and the buyer will pay off the existing liens with their own financing. Without equity, you need to do a short sale and the buyer comes in with their own financing once the short sale is approved. In regards to "Just a transfer of the property to you and have you make payments on the property?" Only if the loan is assumable can you take over the payments. You'll find VA loans to be assumable and most loans made before 1985. Now if the property has equity and the lender hasn't called the entire loan balance due (such as a notice of trustee's sale in California), then you can purchase the property "subject to" and bring the loan current and pay monthly until you are in the position to refi or sell the property. If the loan isn't assumable and you bring it current, chances are that the lender won't call the loan. You can also use a PACT trust to do this without worrying about the lender calling the loan. If no equity, you will need to short sale and bring in your own financing. What I would do would depend on what I was trying to accomplish.