Anyone thinking of buying a foreclosure should read this article
Apparently, pending the appeal this article addresses, a buyer can end
up without a valid title, that is, without the house he thought he
owned, and must then track down the title holder (that no one could
find) prior to the illegal foreclosure, and sue them.
It could be messy if the insurer had no precedent in this specific
type case, and decided to go to court to see what happens. Otherwise,
they insured, they must pay.
Safe would be to inquire about the actual title before putting up a
single dime (the only logical reason for posting the article). Insist
on unshakable legal verification (copies with medallion signatures or
whatever), and walk away blowing a whistle if you cannot get them.
Imagine going through the qualification, down payment, fees, fixing
up, moving in, then getting an eviction notice, then facing down an
insurer to get paid. Much simpler to be 100% you have verified the
title. The greedy, unprincipled (pun), banks really messed this one
up, did they not? Call me stuffy, but I bought a standard for sale
(and spent hundreds on a lawyer besides to check everything) - I'm not
sure I understand real estate at all so I saw no reason to go off-road
with a foreclosure.
The prices are already at rock bottom, so why not buy from some guy
who kept up his payments and has a clear record?
It might be informative to look at what happened back during the great
depression and how investors fared after buying up real estate at rock
bottom prices. If I am not mistaken, that was a period when the rich
got richer and the poor became poorer, and probably the reason is that
the rich could afford to put out money and then hold on to their real
estate purchases for a long time. I am convinced that real estate is
best viewed as a long-term investment, not all that different from the
stock market. You do better when you "buy and hold," and do not panic
because of short=term ups and downs and current and temporary economic
conditions. It is true that some people do well buying houses at
bargain prices and then fixing them up and flipping, but that strategy
carries risks, just like buying and selling stocks in on a short-term
basis carries risks.