Industry News

Legal risks of foreclosure investment: Evicting holdovers

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 2.) When Herman, the owner of the property my friend and I had purchased at a foreclosure auction, suddenly woke up and claimed he hadn't heard one word about the foreclosure action against him, we'd already paid almost $200,000 in cash for the property. We weren't allowed to enter the property while Herman made his legal arguments that essentially asked for a do-over of the entire foreclosure. All we could do was pay the debt service on our investment -- and fight back. Our problem was that we had no legal standing to dispute Herman's claims. In other words, we weren't parties to the foreclosure ...