Buying A House In Foreclosure
Q: I'm interested in buying a house which is going through foreclosure proceedings. The house has a loan which is assumable at a good rate, however, the owner is a number of months in arrears on both the first and second mortgages.
The bank requires that the loan be current before title can be transferred, however, if I pay the outstanding amount in arrears, it would seem that the tax deduction for the interest amount in arrears would go to the current owner.
I would like to know if anyone has had experience in dealing with a situation like this, and if there is a way I can get the tax deduction for bringing the owner's mortgage to a current position.
Also, if anyone has any interesting experiences with buying foreclosures, (pitfalls, gotchas, etc.) I would appreciate hearing about them. Thanks in advance for your comments.
A: I don't know what the laws are in Columbia, but in California there are very strict laws designed to protect the Seller from being swindled out of his house because he is in distress. Get a lawyer or look up the law yourself for your area. No matter how good your intentions, if you don't follow the exact procedure you could be liable. Forclosures can be a good deal but you have to be careful to do everything right. I have no idea about the tax situation for reinstating a loan. .