buying a forclosure, need some help! :)

[jkypes]

What is the name of your state? Michigan

Three quick questions:

1st, if i buy a forclosed mortgage from a bank for less than what the homeowner owes the bank, the only way the homeowner can get the home back is to pay me what they originally owed the bank, correct? Can i add any fees to that?

2nd, If I am the one holding the loan on the property (i am the bank), can i get sued in ANY way from someone on the property getting injured, or is the homeowner soley responsible?

3rd, Should i have insurance on the property, or do i just require it from the homeowner until their 6 month period of forclosure is up?

Any suggestions are welcomed, this is my first forclosure purchase, and i just want to make sure im doing it right.

 

[Bigfoot]

Buying a Foreclosure

1. If you buy the property from the bank for whatever amount, you are the new owner. The homeowner is no longer the owner after the bank has foreclosed on him/her. They can repurchase the property if you sell it to them. That's not likely because they have to qualify for a loan, unless they have cash money. All the equity is yours.

2. I'm not sure I understand this question. If you are the lender (bank?) you will want proof to know that your asset is protected from loss. As I understand it only the owner is responsible for paying for the coverage.

3. Yes you should have insurance to protect yourself from liability. Even if you rent it out, the renter can carry renter's insurance to protect their "stuff" and you can carry dwelling insurance to primarily protect the structure. No matter what you require from the occupant, you can't shift your liability. After all, what if they forget to pay on time and the house burns down?

 

[jkypes]

Hey Bigfoot, I appreciate the help!

Im familiar with rentals, but the issue is that here in Mi, the homeowner gets to stay in the home, even 6 months after the bank actually forcloses on them. They (the homeowner) hold on to the deed for that time, so they technically still own it as far as i know. You are correct that they could buy it back if they paid the loan in full, but what im worried about is someone else coming and offering them extra to payoff the house for them. The new person would then in effect override my purchase of the bank note, and i dont want that to happen. I would hold the loan, acting as the mortgagor. Thats why im wondering if the "homeowner" should have the insurance, or i should.

for example: My personal home right now has a mortgage, but i pay for insurance. does that mean that they are paying for insurance on my home, on top of mine? Also, does that mean that if someone is injured on my property they can sue the bank?

From what you wrote, I think that i dont need insurance on anything myself until the deed is signed over to my name, but i have to make sure that the deedholder does have it.