If you do make the purchase you will not be able to get it from the trustee sale. Don’t confuse an REO with a trustee sale.
The home you are living in now is (if I read your post correct) in default or close to it. The foreclosure process is essentially starting. The culmination of the process will be a public auction known as a trustee sale. Anyone can attend however in order to purchase the home at the trustee sale you will not be able to come in with conventional financing. If nobody else does either the home will go back to the lender. Let that happen.
Let the home go to the lender and then once the home becomes an REO then go after it. If you do make the purchase from the lender all of the liens will be cleaned up and you will not have to worry about anything.
Also you know my stance about living in a home during the foreclosure process. All bets are off. Indeed while the state is very tenant friendly at one point or another you will be out of there. I always play things close to the vest and am conservative so yes while I would say you are safe until the trustee sale, after the trustee sale things do get a bit more dicey.
Finally as HLS said the 10 year has been on the move. Indeed from the low of 3.85 not less then 2 weeks ago we are almost 35 basis points up. This translates to a DIRECT hit on long term rates. It is not inconceivable that in another few months the 10 year can be back up another 50 bp thus bringing rates up as well. This will serve to help depress pricing and for those with cash, will be beneficial.
