Foreclosure due to death

Foreclosure Investing
1

Hi Sean or Michelle,
Thank you for your informative responses. I am interested in a property going up for trustee sale. The deed of trust I am bidding on is the first deed; there are no other liens. My concern is that the reason the property is foreclosing is due to the death of the owner. The vesting on the grant deed showed HIS NAME, A MARRIED MAN as HIS SOLE and SEPARATE PROPERTY. His wife had signed an interspousal transfer deed at the time of the deed of trust, as well relinquishing her rights to him. Are there any concerns in purchasing this property from a deceased owner of record? He has no equity in this property (i.e. he owes $380,000 but the property is worth at most $200,000). I also noticed that someone paid the first installment of the property taxes and I assume it is his family since it was paid in early November. Why would they want to pay the taxes in this case? The deed of trust does not have a due on death clause and he is the sole borrower on the deed of trust. Will I run into any problems later if I win the bid such as recission of the sale or probate from family ? Thank you so much.

Quinn

2

Another note to the above case: what if he has mortgage insurance?

3

Hi Quinn, We have not heard of a case where a probate court petitioned to have a sale rescinded. If the heirs of the estate were going to save the property they would do so prior to the trustee sale. Chances are they have made a decision to let the property go because it is over encumbered. A mortgage insurance policy would protect the lender not the homeowner and would not affect a bidder at trustee sale.

4

And the taxes were almost certainly paid by the lender.