Foreclosures

[matkirk]

Do they have foreclosures here like in the US and where do you find the houses that are foreclosed? (and I don't mean the stupid trespaso!!!

[T.J.]

Yes and no. They are sure not like in the US.

The lenders have great difficulty in evicting the borrowers. I looked a bunch of them a year ago, through a list I got from an attorney in Mexico who had one of the big banks as a client. This person was in some way trying to basically flip the properties and make some spread.

After looking 15-20, none of which were accessible as the owners of record were still there, I gave up. I followed up on one of them that was an easy $350,000 less than what I know it would sell for, but if you can't get possession, none of that matters.

The lenders sort of wanted, and this may not be true with every bank, to get you to take their position through the finalization of the foreclosure and possession nightmare

I did buy a place with a small remaining mortgage on it with an employee being the owner/borrower and a hospital being the lender. My attorney advised me to pay off the mortgage but not close until the "cesation of rigthts" (satisfaction of mortgage) was recorded at RPP. I was protected in a rather uncomplicated way. I took possession. I paid no interim payments to the seller at all, other than I paid the predial.

It worked out great for me as it took over a year for the hospital, whose name "may have" started with an "I", to get the paperwork completed and delivered for recording.

In the meantime, the dollar got stronger and stronger and it took me far less dollars to convert to pesos to pay off the rest of the balance according to the contractual terms.

Bottom line - get a good lawyer.

[matkirk]

Wow thanks for that T.J - pretty interesting!

So basically the people stop paying but don't get kicked out in a lot of cases? Hence they sort of sit there are try a get a trespaso out of the deal?

So effectively you could buy a foreclosure from the bank but you'll probably be getting some ''non paying tenants'' so to speak in with the bargain.

[T.J.]

Exactamente Mat.

Not far off from what is going on in the states where these poor unfortunate folks, who got loans they should not have been approved for, and who often lied on their applications, and no "skin in the game" with these BS gov't down payment assistance programs, and then get their loans renegotiated at the expense of some lender who got involved by buying a loan from another lender who bought a loan, etc. Then some Goldman Sachs guys cut sweetheart deals using gov't money to by the loans, sell the property for less than was owed on it originally and make a fortune on every single deal.

All at taxpayer's expense. Go figure why we are in such a damn mess in the US.

A few years ago when the market was going up at non making sense numbers, I was one of the partners in 1/2 a duplex in a not so nice neighborhood. I did nothing in terms of selling the property. It sold for a sizable profit and I took my share and that was it. The partner handling the deal had the broker contact me and I did not ask for the minute details. it was just X dollars, closing date of Y, only a short contingency for loan qualifying by the pre-qualified buyer. Seemed like a no brainer and the price was waaaaaaaay higher than any of us expected.

A few months later I had a similar property to sell and called the broker to find out the details of the financing. I was shocked to know that this charming young lady with just basic employment and income got this loan for $159,000 USD. It made no sense. This lady, a college graduate and 2 or 3 years out of college, had only $750 in the bank, none of which was savings.

I just went to the public records. The sales price was $155,000. There were mortgages in the amounts of $124,000, $25,000 and $10,000 = $159,000. I don't know the terms of the $25k other than it a 50 year loan. The $10k loan is for 20 years but there are no payments due. 1/240 of the $10k is forgiven each month. That very well could be the case on the $25k. These "gifts" as they were, are not taxable to the borrower, even though they are essentially forgiven, which is normally a taxable event. All the buyer has to do is pay her $124k payment, has tax free $35k in handouts and the place is hers. Oddly enough, she is paying right along as the property is not in foreclosure.

What a country. This free money bill allowing this was sponsored by Dem Senators Cranston and Gonzalez and although signed into law by Pres Bush in 1990 both the House and Senate were controlled by the Dems.

[coby]

Thanks TJ - I too had been wondering about that for a long time. I was wondering if any such places even existed, since I know very few Mexicans who take mortgages to buy homes ala the US. Almost all of our friends and families have inherited places, or land, and then built themselves. Of course, most of our Mexican family lives in a fairly rural area (in Jalisco) so maybe that is part of it too.

This thread has peculiar timing, as not more than two weeks I bought a foreclosed property back in the US. I wasn't even in the market, but a business associate of mine had a pass to a bank auction in St. Louis and...wow, the deals were pretty incredible. Most of these places had been under the care of the bank for at least a year (most longer) and had failed to sell. I ended up buying an older house, completely trashed on the inside, near the town where my father lives (read: the country) for $4k. It will probably take at least $25k to make it livable again (my summer project? oh god...) but still, hard to beat.

I'd be slobbering to find similar deals in this area...

[T.J.]

Coby,

Good luck on your project.

Real estate is pretty simple if you remember my dad's Golden Rule:

You never go wrong missing a good deal; you go wrong making a bad one.

And of course you need to be really careful buying in a down market when the end may not be in sight. I always try to have an exit strategy whether I buy for a short term flip or a long term hold.

An old boss used to have a rule too:

A property bought "right" is 2/3 sold.

More simply put, if you buy it "right", you are ahead of the game from the get go.

Cheers,

[RiverGirl]

We looked at a number of foreclosures here a few years ago. We made friends at some of the banks here and got the lists. Then we scouted out the properties. In all cases the properties listed were actually vacant. So I suspect we had a different list than the one TJ had. I think these props were at a different stage of foreclosure.

In nearly all cases the properties were under guard. So we made friends with the guards and got them to let us inside to take a peek. I think there was only one property out of dozens that we pondered that we weren't able to get inside of. My husband is very persuasive, I guess...because all I did was smile.

[matkirk]

I found this on the Bancomer website and got quite excited

Inmuebles

and it said ¡¡¡No deje pasar un minuto mas!!!

So I clicked on search properties

and the website crashes

[RiverGirl]

It did not crash for me using the latest version of Firefox.

[mixz1]

Works fine for me in IE8, Chrome and FF. Didn't try Safari as the Mac is in Atlanta. Looks like time for a little software maintenance.

[ToriB]

Tried with Mac and I got errors.

[matkirk]

yeah works fine for me at home as well - must be something at work???

[RiverGirl]

Well Bancomer's site is garbage, and they clearly don't test it, so don't feel badly. Hubby has an account with Bancomer and the site crashes regularly for him. My post should have been that it didn't crash in Firefox at the time I tested it...