Who will pay the mortage or amount the previous owner owes if I purchase a foreclosued home @ an auction?

Answer 1

The home should be cleared of all mortgages by the bank who currently holds the loan and let you out-bid them at the auction. However, this does not clear the home of all liens. Unpaid taxes, construction liens and anything else outside the mortgage could remain on the home and transfer to you. That's the risk of buying at auction, you really have to do a lot of homework prior to bidding. I would do a title search on the property as soon as possible.

I've included a link about buying foreclosures. Feel free to get in touch with me if you have questions!!

Answer 2

That isn't something you need to worry about...if you purchase a home at a foreclosure sale, the bank will make sure you get a clear title as far as mortgages are concerned.

Sorry, gotta disagree with Acermill on this one.

I've bought and helped others buy, properties at auctions and this has never been an issue...the PURPOSE of the foreclosure is to get as much money as possible to satisfy the debt....if there is $100K owed on the house and all they got at a foreclosure is $80K, then they will clear the title and go after the original owner for the $20K in the form of a deficiency judgement.

There is ONE catch to buying foreclosures...

You need to research, however, the property PRIOR to the auction (as these are posted in advance) to make sure there aren't other debts such as back taxes, etc that are due on the property....those the mortgage company are NOT responsible for and they do not prevent clear title from being transferred...you also need to check for UCC liens.

Answer 3

You must observe the laws of your state very carefully. In some states, foreclosures are purchased along with all the liens which are currently attached to the property. Hence, if you think you're getting some sort of steal when you get a property for $5,000, you may have just bought a house for $5,000, along with a mortgage for more than the property is worth.

Before you engage in any bidding at foreclosure auctions, I strongly suggest that you study your laws very diligently.