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Ray
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 40044
Experience:  Texas Attorney for 30 years dealing in real estate
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My clients house is in foreclosure and he has a friend who

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My client's house is in foreclosure and he has a friend who wants to purchase the house. The friend would then lease the house back to my client after purchase. Considering foreclosure laws, is it okay to do this? Are any transactions "forbidden"?

RayAnswers :

Thanks for your question and good evening.There is no prohibition here against a friend purchasing the property and renting it to the current owner.Here the lender can sell it to anyone that makes an acceptable offer.Once the friend here has purchased the property it is theirs to do with it what they want.Again so restrictions although the friend has to buy it as a rental property so the interest rate for them if they finance it will likely be a little higher than an owner occupied property.Also the friend is going to need a landlord policy here instead of regular homeowners.As long as the friend here understands that they are buying a rental property there is no prohibition against them doing so.

RayAnswers :

The friend here would need to contact the lender about a purchase of the property.The friend should give the lender a call and go from there.

RayAnswers :

Florida here has judicial foreclosures.The lender will have filed a civil suit to take back the property.Give the lender a call and ask about the property and where it is in the foreclosure process.I wish the friend good luck here.

RayAnswers :

It has been my pleasure to assist you tonight.Please let me know if you have more follow up.Thanks again.

RayAnswers :

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This communication does not establish an attorney client relationship here.Information provided is not legal advice. Rather it is simply general information.

RayAnswers :

Reference and timeline on the Florida foreclosure process.

RayAnswers :

Thanks again.

Customer:

Along those lines, would the friend be able to eventually sell the property back to the original owner (my client), even though the property was previously in foreclosure?

RayAnswers :

If the friend here paid cash of the terms of the note do not prevent a transfer.If the friend finances the house he wants to make sure there is no due on sale clause.A due on sale clause requires lender approval before transfer of title here.So yes it is possible in a cash sale or if the terms do not prohibit it.The friend may want to have their own lawyer involved to review the closing documents.

RayAnswers :

If the friend were to buy it for cash then they can do whatever they want with it.Start with lender and see what response you get here.

RayAnswers :

I wish you the best.

RayAnswers :

Reference to due on sale clause.

RayAnswers :

Thanks again.

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