Industry News

Legal risks of foreclosure investment: Owner wants a do-over

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Editor's note: With foreclosures on the rise in many parts of the country, Inman News examines the legal risks of investing in foreclosed properties at auction, describing the most common legal problems that arise and explaining how two investors had to fight in court to keep the property they purchased at auction after the former owner raised legal challenges. (See Part 1 and Part 3.) "One risk in investing in properties at a foreclosure sale is not doing an appropriate title search and knowing what that property is encumbered with," said Marvin E. Katz, an attorney with Ben-Ezra & Katz, P.A. in Fort Lauderdale, Fla., which represents lenders in foreclosure proceedings. "If you think there's a lot of equity there, it could be that the second mortgage was foreclosed, and you're taking the property subject to the first mortgage." Colorado purchasers are warned of just such a possibility because an influential Colorado resident was burned in a foreclosure sale, said Jon Goodman...