Posted by David Caro on October 18, 2003 at 01:46:59:
As far as I know, controlling a property with intent of foreclosure is illegal. Plus there are risks that no one will bid for the property. Usually banks are the first to bid to protect there interest. Also, how would you get the deed from the destressed owner?
Banks, REO’s, and Markup - Posted by David Caro
Posted by David Caro on October 17, 2003 at 02:00:47:
I read in Theodore J. Dallow’s foreclosure book that banks aren’t allowed to make profit on REO’s. Is that true at all? Am I misinterpretting what he wrote or what?
Yes, but - Posted by Eric -GA
Posted by Eric -GA on October 17, 2003 at 09:24:32:
Once a house is REO, the bank can sell it for whatever it wants, but, when a house sells at the courthouse steps, any money not needed to cover loan obligations, liens, etc. does eventually get back to the owner of the house. That applies in GA, at least.
Because that is the case, I’ve often wondered if, instead of going though all the hassle of buying a preforeclosure if, in a property with enough equity and no other liens, someone could just get the deed, let the house foreclose, knowing that it would get bid up at auction to more than the amount owed. Then just wait and collect your check. Anyone tried that??
Eric - GA
Re: Banks, REO’s, and Markup - Posted by Rob FL
Posted by Rob FL on October 17, 2003 at 08:27:37:
Banks sell their REOs for whatever price they choose. There are no limitations that I am aware of. They normally get an appraisal or a BPO once the house is foreclosed in order to determine a listing price.
Re: Banks, REO’s, and Markup - Posted by Sean
Posted by Sean on October 17, 2003 at 07:08:18:
Banks are allowed to make as much off an REO as they can, there is no law or rule that says they can’t sell an REO for more than what they are into it for to my knowlege.
I don’t know this Dallow guy, but banks sell pretty houses for more than their mortgage balances all the time, and some banks do some very nepharious things to forclose on older loans just to sell them for equity profits.