Is there a way to get a loan through a bank for an auction foreclosure? If not, does anyone know of any legal problems with someone buying the property at auction (like a friend or family member with cash) and then immediately selling it to you the typical way (FSBO/realtor and mortgage) for the same price they paid at auction? Thanks.
Hi Johnson,
You must have the cash in hand when bidding at a trustee sale. Unless you have access to a credit line then a bank is out of the question. There are cases where a private investor will work with you at the trustee sale but be prepared to use a substantial amount of your own money and you will have to pay hefty points and interest for the use of this money.
If you know someone that has cash they can certainly buy the property and flip it to you.
We should point out that buying property at trustee sale is very risky. Check out this video for more information.
http://www.foreclosuretruth.com/blog/sean/video-foreclosure-auction-guide/?
In a few counties in the Bay Area there is a lender group that makes loans right on the Courthouse steps. However, they almost without exception, only loan to professional buyers. They want the buyer to put up 30% of the purchase price. Interest is 12%. Points can be 5 altho heavy borrowers can pay less