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We have run into a weird situation purchasing a home and am hoping someone can answer our questions.

So we came across a vacant house that we wanted to look into buying. We were able to track down the owner. According to the title company, the home started the Judicial Foreclosure process about 2 months ago, and the home owner is still the owner on the title.

When we spoke with the owner she said that she had no idea that she still owned the home as she had not paid any payments in over 2 years and had filed Bankruptcy.

So – is she allowed to sell (short sale?) the home to us because she is still the legal owner or is it a situation where nothing can be done because the process of judicial foreclosure has started?

The Mortgage holder is GMAC and I plan on contacting their bankruptcy department tomorrow, but would appreciate any feedback you have. FYI we are in the state of Oregon.

Thank you!

3 Thoughts on Is a seller allowed to sell their home if they are in judicial foreclosure?
  1. Reply
    Pascal the Gambler
    April 7, 2013 at 10:51 pm

    A seller can sell his home as long as he owns it. Short sale must be a approved by the lender, as always. Doubtful they approve if they already started foreclosure.

  2. Reply
    April 7, 2013 at 11:25 pm

    You would never close before the foreclosure finished, so just wait it out and buy after the foreclosure.

    This one would have to both get approved by the bank and the bankruptcy judge. Neither is fast enough of the foreclosure started 2 months ago.

  3. Reply
    April 7, 2013 at 11:54 pm

    GMAC and the bankruptcy court will not talk to you. You are not a party to the matter. Your best bet is the short sale route. As a matter of fact, you cannot do a short sale until foreclosoure has been filed. The owner will have to list the home with a Realtor and the Realtor initiates the short sale. In many states if the property is under contract then the foreclosure sale is put on hold.


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