INVESTING IN FORECLOSURES FOR BEGINNERS LEX LEVINRAD
A “lis pendens” is a written public notice that a lawsuit
has been filed concerning real estate. This notice is
filed in the county public records against a piece of
property. This notice is also often listed in the classified
ad legal section of some newspapers. Filing this public
notice alerts any potential purchaser or lender that the
f you are a new real estate investor thinking
title to this property is “clouded” or unclear.
about investing in foreclosures, there are
some key points for you to consider before
When a property has a “clouded” title then the title is
not “free and clear”. This makes the property less
you begin investing.
attractive to potential buyers or lenders. In reality, once
The first step is for you to understand how the
a “lis pendens” is filed, a property cannot be sold or
foreclosure
foreclosure
refinanced without the buyer being fully aware of the
process can be broken down into three key stages.
fact that the “lis pendens” has been filed. The only
process
works.
The
way to get rid of a “lis pendens” is through the
•
Pre-Foreclosure
foreclosure process which wipes out a “lis pendens”
•
Foreclosure Auction
and clears the title.
•
REO
Pre-foreclosure
The first step in the foreclosure process is called
pre-foreclosure. When a homeowner has not paid
their mortgage for more than 90 days, the bank
that owns the mortgage on the property files what
is called a “lis pendens”, which means “lawsuit
pending” in Latin.
“investing in pre-foreclosures
is very competitive
since everyone has access
to the same information”