A Sheriff's Sale and a Foreclosure/Trustee's sale are 2 different things in my area. A Sheriff's Sale is when the property is being sold for non-payment of back taxes and prior owners have a period of several years to reclaim the property and pay the amount plus interest. A Foreclosure/Trustee's Sale is when the note is called due and the Lenders Trustee is soliciting offers on the Courthouse steps..I believe that full payment is due within 72 hours if you purchase in our county. Very few people purchase a home at a Trustee's sale around here...most of the Sheriff's Sales are bare land and that is a bit safer purchase. Many times if you wait for the Lender to go through the foreclosure process the home will be priced less than what it could be purchased for on the Courthouse steps and it will also have clear title. You will also have a much longer time frame to close and enable will you to do the inspections, financing, and a proper/up to date title search. Most lenders want a pre-approval letter submitted with an offer on a foreclosure so get one of those ready. Get used to waiting if you are going to purchase a foreclosure...some lenders are easy to work with and others will not give an answer until they are good and ready and there is nothing you can do about it. My advice is to find a Realtor in the area of where the home is at (make sure he/she has completed several foreclosures) and tell them about the home and let you know as soon as it hits the market. If it is a Fannie/Freddie foreclosure then there is a 15 day "First Look Program" where only offers from Buyers that plan on using the home as a primary residence will be considered...in other words if it is a second home or investment property your offer will not be considered until after 15 days...I believe that Fannie went to 20 days this year but Freddie is still 15. Again, get an experienced Realtor and this will be much easier. Many listing agents of foreclosures hate dealing with newbies because they don't know the process and especially the process of waiting.

Some one asked why normal people (without whupping out their documents); B) Don't remember the terms of their insurance policies, My first homeowner's policy, I read cover to cover. There were several instances where the language was so muddy that I couldn't understand it at all. (And I've edited securities law treatises, so I'm used to muddy language). So I took it to the insurance agent. When I pointed out how it didn't make sense, he agreed it didn't. But he couldn't explain it to me either. C) Don't know the instruments invested in their 401(k)s, I've tried and tried to find out what was in some of the funds in my 401k (the 'life cycle funds'). Even when I thought I'd gotten it (the 401k representative visited the office and gave me some ticker symbols to use on Yahoo Finance) it turned out I was given the wrong info. Plus, I once called trying to find out what the fees are. They said 'there are no fees.' Bull. Of course there are fees. There are always bloody fees. They're just so thoroughly hidden that you'll never, ever find them in any document. At least in that 401k plan. D) Don't know their own marginal tax brackets, Given that this isn't on one's pay stub, and given that when you file your taxes, there are so many things to add and subtract, I'd be surprised to learn that anyone knows their tax bracket. The tax code is so complicated that no one understands it, not even the IRS. F) Don't know whether their employee-benefit life insurance is cash value or term, Again, if I ever got any documents on this, I'd pass out in a dead faint. H) Don't know the costs of insurance subtracted (openly or opaquely) from their paycheck, Due to the recent sale of my company, our paychecks have been royally screwed up for the last month. I actually had to create a spreadsheet to figure out how they'd messed up. Again, since there's no disclosure of what percentage each item is, and they routinely combine things like medicare and SS, and--just for fun--they disclose insurance costs on a monthly basis, but pay biweekly, it's really, really difficult to determine what's correct. As far as 'everyone should always know what they're signing,' I've been to 2 doctors' offices now where there's a electronic signature pad (like the ones at the checkout counter at the grocery) and they tell you to sign it. "This is for the HIPAA disclosure,' and 'this is for the insurance.' You have absolutely no way of knowing if you're signing what they say you're signing, or if there's anything 'unusual' in there. I have no idea how this is legal, but there it is. There;s no use saying 'see another doctor' because there's only so many that the insurance will allow you to see (and I won't even get into figuring out health insurance rules). Bottom line: things are routinely hidden from people--consumers--to prevent them knowing exactly how they're spending their money or what they're signing their names to. They're hidden by using tiny text, complicated language, abstruse math, impenetrable phone trees, and rules that can be changed on a whim (but only by the business). Most business dealings people engage in nowadays are skating on the edge of adhesion contracts. The laws that exist for disclosure are routinely sidestepped thru the use of the aforementioned tactics. What good is disclosure if the part about the fees you'll have to pay are hidden in a footnote on page 57 in 6-pt type? And don't talk about 'competition.' What help is that when all the companies in an industry do things the same way? (Anyone sign up for cell phone service without an early termination penalty--even if their service stinks? Didn't think so.) I hope some day Americans learn to push back and demand that the businesses they deal with actually serve them, fairly, disclosing all terms and conditions upfront and in simple language.

I did read the article. As you noted, the $250,000 wasn't just for home maintenance. It also included a scholarship fund for the three children. If you estimate $15,000 per year(which is a bit over the 2006 average in-state tuition + fees + room + board) and assume 4 years of college per child, that comes to $180,000 for all three children. That leaves $70,000 for home maintenance. Admittedly, $70,000 is still quite a bit of money and this is based on guessed numbers... but still. My point is just that the gift of an "extreme" house can open the door to comfort, but it can also open the door to risky decisions that might not have otherwise been options. That's why I can feel sorry for them. I would feel horrible in their shoes. How awful to feel like you had everything set, to think you were being smart and starting a business, and then to have everything come publicly crashing down around you. It would have been kinder to give them a smaller house or better financial training than, "seek your own advisor."

Marys1000 has a reasonable concern. What we have found astounding is the universal lack of communication. How does anyone get anything done? I mean really, no one talking to anyone. Not even within the same bank. A short sale is out as it requires way more than the defaulting owners are going to be willing to do. I suggested a deed in lieu of foreclosure - I'm familiar with those - but this is a property with a small first mortgage in favor of a town (for a business improvement loan) a large second (the large bank that thought it was the first, ha, fooled them) and another small third to a different consumer lending company that thought it was a second. (Ha, again) All told, the three loans total over $100K than the FMV of the mortgaged property. Yet, we had worked all the math out, done our due dilegence and had a price in hand we would have paid the Bank and taken the property subject to the senior lien and the outstanding tax and municipal liens. Living through this FUBARB - I am losing any sympathy for the lenders who got themselves into this mess. The two national lenders the Bank and the Finance Company - when they did the refinances, either failed to update their title records or relied on a title company that did a very poor job. The senior lien should have been caught at the time the Bank did the refi. But, this is "the" house and we'll hang in there. Probably all the way through to the second foreclosure sale. After all, we have our money from what we made selling our house - making money - it's not going anywhere. I was hoping against all hope that we would be out of this tiny apartment and into a house with all of our stuff out of storage before Christmas. :( MP