FBI getting involved in Foreclosure auction - Posted by Michaela-CA

Posted by michaela-CAv on January 21, 2011 at 16:18:06:

Then they changed. I don’t work those overages, but tried to a few years ago. Went to everyone I could come up with, everybody put me off. It’s CA public records - records have to be made available within 10 working days of request. Threatened them with violation of laws etc, but they wouldn’t budge. Finally emailed it to me 2 weeks after the deadline.

I guess someone made them take notice.

Michaela

FBI getting involved in Foreclosure auction - Posted by Michaela-CA

Posted by Michaela-CA on January 21, 2011 at 09:51:48:

So, who’s really the victim here? The bank gets paid off. So, is it the homeowner, who likely doesn’t even know that he could claim the overage? Or is it the county, who can keep the overage, if it’s not claimed?

No victim. - Posted by lukeNC

Posted by lukeNC on January 27, 2011 at 12:33:42:

There is nothing stopping another bidder from coming in and refusing to play by the “bid riggers” rules. Those with cash make the rules, they just can’t stop someone else from bidding by threat of force. There’s nothing stopping the lender from placing an upset bid to get the property.

Re: Sherman Act violation - Posted by Potash

Posted by Potash on January 21, 2011 at 14:48:06:

Despite what the article states, two or more bidders conspiring to bid together is not a violation of the Sherman Act because the parties bidding have no contract with the party conducting the sale. It may be a violation of some other State law, or unethical, but it is not a violation of the Sherman Act. Not just my opinion, but the opinion of a State Supreme Court that addressed a similar dispute.

As far as who the victim is, well that would depend on the specifics of the sale and the laws of the State the sale was being conducted in, regarding over bid distributions, but since the vast majority of 3rd party bids these days are on lender deficiency bids, then the victims would usually be the said lenders that bid the deficiencies, but, again, that would vary by State law.

The victim is… - Posted by JT-IN

Posted by JT-IN on January 21, 2011 at 12:07:17:

Everyone that is a party involved in the chain of title is being slighted; homeowner, lender and maybe the county. It violates Fed’l law by taking an unfair advantage, and therein thwarts the process intended of the highest open bid.

I have always heard about the collusion at auctions, but honestly… after bidding on more than one thousand homes at sheriff sale, I can’t honestly say I ever saw anything like what is described in the article. I have seen guys partner up to spread the risk of the deal, but not actual suppression of a bid.

Maybe except the time the Pakistani guy whose friend’s house was going to tax deed sale and their group was bidding on the property, as was I… And after the guy made some hand gestures threatening me for continuing to bid… Of course after that I ran them up even further after that little display, which certainly cost them another 50K at least. Since there was some tax liens on the property, I felt as if I was doing my patriotic duty in driving more $$$ to the US Treasury that day. They were p.o’d BIG time. Just another WAR story.

Re: FBI getting involved in Foreclosure auction - Posted by Natalie-VA

Posted by Natalie-VA on January 21, 2011 at 11:23:40:

Hi Michaela,

The victim is the former homeowner who had a right to any overages and gets ripped off when the bids are artificially low.

Best wishes on your move back to icey Atlanta.

–Natalie

Re: Sherman Act violation - Posted by michaela-CA

Posted by michaela-CA on January 21, 2011 at 15:28:50:

"but since the vast majority of 3rd party bids these days are on lender deficiency bids, then the victims would usually be the said lenders that bid the deficiencies, but, again, that would vary by State law. "

But if there’s actually someone bidding on the property and gets it above the m/m bid, then the lender doesn’t lose anything.

In some ways I was kind of sarcastic with my question about who being the victim - as I think it’s more the county or state that is pushing this, because they lose the potential revenue.

Michaela

Re: FBI getting involved in Foreclosure auction - Posted by michaela-CA

Posted by michaela-CA on January 21, 2011 at 11:30:47:

Natalie,
you’re right, but it’s mainly in theory, as most home owners have no idea that they can apply for the overage. They usually only find out when investors, who work that area, notify them. If it’s not being claimed it gets to stay with the county.

So, I don’t believe that this is done for the good of the poor homeowner, but suspect, that it’s similar like in the Joe Kaiser case, that the counties have seen their coffers getting leaner, due to investors finding the home owners, when in the past that money stayed in their pockets when unclaimed.

Just my theory

Michaela

Re: Sherman Act violation - Posted by Potash

Posted by Potash on January 21, 2011 at 17:19:50:

In some, probably most, States the Lender would be entitled to the overbid, up to the amount of the deficiency bid, if they bid a deficiency. Potash does not know specifically how that would work in CA. I do not see your point about the County being entitled to the overbid, as overbids only revert to the County when no one claims the overbid, which happens only a small percentage of times if it is a significant amount of money.

Re: FBI getting involved in Foreclosure auction - Posted by ke in sc

Posted by ke in sc on January 22, 2011 at 07:47:12:

M

This goes on…I have seen it in more than one or two counties.

The victim…interesting question. Does their need to be a victim for a crime to be committed? Just asking.

Let’s see, as JT says the creditors…any 2nd mortgage, 3rd lien etc might get money of it gets bid up all the way. Or the homeowner; here at my main county the court automatically gives overage to homeowner if there is any. I’ve seen that happen ona house I bought. How about OTHER INVESTORS who wont play ball. They run us up on other houses we want so we wont come back to the auction. I have heard one say “we will pay too much for a few to run him/her out of town”. So maybe little ole Ken here is a victim.

email my privately if you want to here the whole story

Unclaimed Property - Posted by Lee in La

Posted by Lee in La on January 21, 2011 at 12:27:42:

In Louisiana, these “overages” are supposed to be
turned in to the state, it may be true in other states.

The Louisiana "Department of the Treasury"
http://www.treasury.state.la.us/Home%20Pages/UnclaimedP
roperty.aspx lists a link of like and kind sites
nationally.

See if anyone has turned dollars in under your name
here.

Lee

trustee sales vs. tax deed sales - Posted by Kristine-CA

Posted by Kristine-CA on January 21, 2011 at 19:24:47:

This thread seems to have gotten away from what the article was really
about. It’s trustee’s sales that the FBI is investigating, not tax deed
sales. There is no incentive for CA counties or the state to get
involved in this, as they rarely receive any excess proceeds from a
trustee’s sale. The trustee disperses any excess proceeds to the jr. lien
holders and then the owners. Been a long time since I’ve seen excess
proceeds from a trustee’s sale in my county.

Tax deed sales and excess proceeds are an entirely different matter.

The question of who is really the victim of investors rigging the CA
trustee’s sales is a good one. While it’s not PC to defend a lender, it’s
the lender that’s losing the most in this particular market. A dropped
minimum bid to 1/2 or 1/3 of amount due may (or may not) get the
property sold. A dropped minimum bid might even get the property
bid up. But it’s not going to make the lender whole.

Re: Unclaimed Property - Posted by michaela-CA

Posted by michaela-CA on January 21, 2011 at 13:28:39:

The states all have their own laws about that. In many states it stays with the county, that the foreclosure happened in. And it’s money they count on, even if they officially aren’t supposed to.

Alameda County, in CA, refuses to give out the list of overages after their auction. By law they can’t refuse, but they do. They give it out after a year (when it’s too late to claim).

Michaela

Re: Unclaimed Property - Posted by IB (NJ)

Posted by IB (NJ) on January 21, 2011 at 12:47:08:

Even with it going to the state it represents big money as they have the right to borrow against that money and reap HUGE returns. Take it out of their hands and you will staill cost them $$$. Thus, here comes the AG…

Re: trustee sales vs. tax deed sales - Posted by Potash

Posted by Potash on January 22, 2011 at 10:56:05:

I was talking about mortgage foreclosures and the excess funds generated when there is an overbid at a mortgage foreclosure sale. Your the only one in this thread that has mentioned tax sales. Thanks for playing.

Re: Unclaimed Property - Posted by Lee in La

Posted by Lee in La on January 21, 2011 at 14:09:43:

“Alameda County, in CA, refuses to give out the list of
overages after their auction. By law they can’t refuse,
but they do. They give it out after a year (when it’s
too late to claim.”

Where is the FBI’s investigation of Alameda County?
Rrrrr

Not too late, even in Alameda County - Posted by Kristine-CA

Posted by Kristine-CA on January 21, 2011 at 15:39:26:

I don’t know what CA law covers posting of overages after tax deed
sales, but most counties that are online in CA do post their sale
results…with starting bid and sold price. Alameda County has their
sale results available online right now for for their March 2010 tax sale.
And there are some nice fat overages. Not many, but a few good ones.
There’s still plenty of time to make a claim as an owner or party of
interest.