Foreclosure question - Posted by Dwayne Frazier

Posted by Ben on June 21, 1999 at 21:31:06:


Foreclosure question - Posted by Dwayne Frazier

Posted by Dwayne Frazier on June 21, 1999 at 19:58:45:

I recently attended a foreclosure auction where a property was taken back by the bank as no one bid outbid the bank offerring (I was the only person at the sale and I was there to bid on other properties going to foreclosure). I double checked with the trustee to make sure that this amount was the final bid by the bank and not just an opening bid. I noted the amount which the bank took the property back and did some research following the sale (drive by, title search, comps). I have discovered that the property was taken back by the bank at an amount approximately 50% of FMV (the foreclosing deed was a senior lien). Now I want to contact the bank and express my interest before the bank goes through their process of resell (most likely having the property apparaised and given to a realtor). How should I proceed and what are my chances of success?
Thanks in advance for any suggestions.
Dwayne Frazier

Re: Foreclosure question - Posted by Janine Peterson

Posted by Janine Peterson on June 22, 1999 at 15:11:27:

Since we’re on the topic of foreclosures and sheriff sales, can anyone answer this question for me. If you go to the auction and bid on a property at the foreclosure sale, I was told that you don’t get clear title. Does this mean that if there are other liens on title, that you get the property subject to those liens? Let’s say it’s a secondary lien that is foreclosing, at the auction would you have to bid to pay just that lien off or all liens on the property, or what? If title isn’t clear how can you take care of these things before you sell the property?

I would appreciate any help, or suggestions about which course I can buy that would answer these questions, or perhaps these are questions I should ask my attorney. Any comments???

Re: Foreclosure question - Posted by Irwin

Posted by Irwin on June 21, 1999 at 20:46:22:

You can go directly to the bank and ask to speak with the head of their REO department. Take a purchase agreement already made out, signed and a check for at least $1,000 earnest money. Leave the purchase price blank until you talk to the REO manager and ask how much they’ll take on a quick sale. Who knows? Maybe they’ll even discount the bid, but don’t count on it. You should be prepared to fill in the purchase price for at least the bid amount plus a few bucks.
When you say you “recently” attended this sale, by recently, I hope you mean today, or last Friday. If it was more than a few days ago, or a few weeks ago, you might be too late. Deals like this are usually made the day of or after the sale unless the bank is either out of town or the REO dept. has layers of bureaucracy to go through.
My fee for answering this question is that you disclose where you are. I want to know where they’re holding Sheriff’s sales and no one show up except you.
I’m assuming that you know enough about f/c in your state to know that you have no post sale redemption period. If there is, then don’t go to the bank with an offer. You’ll look pretty foolish if you do.

Re: Foreclosure question - Posted by Dwayne Frazier

Posted by Dwayne Frazier on June 21, 1999 at 21:21:52:

Thanks for your advice.
I am located in Maryland and there is no redemption period. There is, however, a ratificaion period by the court which can take 30-60 days.
One question with submitting an offer. The bank is out of state with no local branch. Any suggestion?

Re: Foreclosure question - Posted by Irwin

Posted by Irwin on June 21, 1999 at 22:09:34:

Ben’s right. If the bank is out of state, and you can’t locate it any other way, you have to get the info from their attonrey.While you’re getting the info on who to call at his client, tell him that you can bring him a check for the full amount of the bid if he can get you a deed to the property. See what he says. I used to do it for investors all the time. I didn’t bother to ask the client for approval. After all, they were getting 100% recovery, and it saved me a lot of work finishing up the legal work on the foreclosure.
This lawyer, if he’s good, might get the job done for you. Keep in mind, it will take an all cash offer. Nothing creative will work here. Now you enter the never-never land of mortgage loan servicing. Is it a bank that really owns the account, or is it a mortgage loan servicing company that just processes the foreclosure for an investor who owns the loan?
You have to work dilligently by phone and fax and who knows how many layers of paper shuffling clerks you’ll have to go through in order to find someone with authority. And then again, there might not be anyone with enough authority to do what you want. It’s easier for them to tell you to wait for the property to be put on the market by their realtor than it is for them to try to do something that isn’t on their checklist.
Sorry this is so long. Good luck.