Lis Pendens on property? (Accord: short sales, foreclosure, mortgage)

[SilverBulletZ06]

According to some digging the bank is under Lis Pendens with the homeowner for a pretty decent sum of money. What does this mean and how can I nab this property?

[Elke Mariotti]

lis pendens


[Latin, Pending lawsuit.] A reference to the jurisdiction (or control) that courts obtain over property in a suit awaiting action.
A notice filed in the office of public records that the ownership of real property is the subject of a legal controversy and that anyone who purchases it takes it subject to any claims asserted in the action and thereby its value might be diminished.

[Elke Mariotti]

Originally Posted by SilverBulletZ06

According to some digging the bank is under Lis Pendens with the homeowner for a pretty decent sum of money. What does this mean and how can I nab this property?

That means the homeowner owes $$ to the bank = is behind in payments.

You can try to contact the homeowner and find out if they're interested in selling. If the market value exceeds or equals the amount they owe the bank (mortgage plus all expenses), it could work.

If they owe more than the current market value, it could end up being a short sale. However, no bank will permit a short sale unless it is listed on MLS, thereby hopefully getting maximum exposure. So if the owner is willing, get a RE agent involved who is truly knowledgeable with regard to short sales (relatively few agents are!!).

And then there are homeowners who "can't deal" with their situation and won't even talk to you. Some will just let it be foreclosed, since that can take 2-3 years with the proper legal assistance, and they can potentially live "rent free" during that time. The ramifications of doing that is food for another thread...

[Yzette]

Beware. A lis pendens is a nightmare. Basically, and in very general terms, if you buy that house, you will be subject to the outcome of the current litigation (ie, if someone is suing the owners saying that it's partly his or her house, too, if the court finds in that person's favor and you buy the house, you've also "bought" a co-owner).

I wouldn't touch that house if I were you, simply because an owner who insists upon trying to sell under those conditions might be trying to unload a problem, and if they're willing to screw a buyer over that way, you can only imagine what else they're willing to screw a buyer over with.

[SilverBulletZ06]

Originally Posted by Elke Mariotti

That means the homeowner owes $$ to the bank = is behind in payments.

You can try to contact the homeowner and find out if they're interested in selling. If the market value exceeds or equals the amount they owe the bank (mortgage plus all expenses), it could work.

If they owe more than the current market value, it could end up being a short sale. However, no bank will permit a short sale unless it is listed on MLS, thereby hopefully getting maximum exposure. So if the owner is willing, get a RE agent involved who is truly knowledgeable with regard to short sales (relatively few agents are!!).

And then there are homeowners who "can't deal" with their situation and won't even talk to you. Some will just let it be foreclosed, since that can take 2-3 years with the proper legal assistance, and they can potentially live "rent free" during that time. The ramifications of doing that is food for another thread...

Funny you say that. We're eclipsing 3 years now.

Where would the amount owed be in relation to the Lis Pendens amount in litigation?

[TomMoser]

Probably much much higher. If it's getting to the point of foreclosure the amount owed is the entire mortgage balance, interest, late fees, attorney fees, and court costs.