More than three months ago, Pima County employee Ron Hay successfully bid $40,000 on a foreclosed home in Marana.
Hay said he's been ready for weeks to move into the four-bedroom manufactured home near North Trico and West Avra Valley roads, which had been repossessed by the U.S. Department of Housing and Urban Development.
He expected the deal to close about a month and a half after the bid was accepted.
He hit a snag securing financing from the lender. He said he has repeatedly submitted paycheck stubs and bank statements, but he keeps having to turn in more information. "It's just one more mistake after another," Hay said.
In the meantime he's having to pay $225 every 15 days to keep HUD from selling the house to someone else. He said he would walk away, but the home is too good a deal.
While Hay's situation isn't necessarily typical of everyone who buys a foreclosure property - primarily because Hay bid on a manufactured home - there are challenges that come with purchasing financially distressed properties.
Hay's real estate agent, Lourdes Delgadillo of Keller Williams Southern Arizona, said few banks will finance a manufactured home and Hay's delays occurred when processing of the loan didn't take place for several weeks after the buyer documentation was collected.
The deal is progressing and closing documents were received by the escrow company Thursday, Delgadillo said. Delays in the process can lead HUD to abandon the deal and find another buyer, however.
Given the complex nature of foreclosure transactions, one missed detail can "blow up" a deal, said Paul Volpe, a vice president and senior loan officer with Nova Home Loans.
"There's no private seller involved and that can cause problems," Volpe said.
It's crucial, Volpe said, to work with a real estate agent and a lender who are familiar with the process. "It comes down to doing a lot of work beforehand to make sure things come together in the end," Volpe said.
Foreclosure paperwork has put an increasing burden on lenders and it's not unheard of for a document to get misplaced in a mountain of paperwork, Volpe said.
That can lead to headaches and delays in certain situations.
One hurdle that can come with foreclosed properties is that in some cases the properties are in distress and need repairs. Before a lender puts any money into a property, it's going to want to make sure the house is safe to occupy and meets minimum HUD standards.
Minor repairs like broken windows and exposed wires can be fixed with the asset managers or agents who are involved, but the process can get more complex if a heater or cooling system needs to be replaced, Volpe said.
And then there's the confusion that comes with news about rushed paperwork and foreclosure documents that have been signed without regard to whether the appropriate procedures took place.
In those cases, Volpe said, any repercussions wouldn't likely fall upon new buyers, because they've obtained the property legally.
In order to prove that a foreclosure occurred improperly, the homeowners would have to show they have enough cash to make up the delinquencies. That's not likely to happen in most cases.
"There's a reason why a property is in foreclosure, or near foreclosure," Volpe said. "You're not making your payments."
Contact reporter Dale Quinn at firstname.lastname@example.org or 573-4197.