Posted by Scott on July 10, 2003 at 10:10:12:
I would go to the sale to see how this will all play out. It looks like there will be no way for you to bid or secure this property at this stage in the game. Go learn how the game is played so next time you will have the knowlege when a deal like this comes up again. Best Luck…
Foreclosure sale questions for the pros - Posted by S. B.
Posted by S. B. on July 09, 2003 at 21:18:25:
Here’s the situation. Found a 2 year old house valued at $160,000. Tried to work a sub2 with the owner, but there was too much outstanding debt to make it worth it.
It’s being auctioned tomorrow, with an opening bid of $118,150. At this price, it would make a very good investment.
The attorney handling the foreclosure informed me they would need certified funds for the entire amount the day of the auction. I do not have that amount! So I contacted the lender (probably stupid move), in a pre-emptive attempt to gain approval for my auction offer (20% down, with additional funds in 10 days). The person who had been handling the loan informed me “the attorney sets the contract terms of the auction” (What? didn’t you fund the loan? Don’t you have any say in how it gets paid back?). He was not aware that an opening bid had been established. To the opening bid amount he responded “we’ll need much more than $118,150 to satisfy the loan. That doesn’t even come close to how much we are owed.” (Well duh, that’s why I’m so excited about this property!)
In my county, very few investors attend these auctions (by the way, this is an out-of-state lender). Is the opening bid usually what the lender is willing to accept? Or do you think they will keep bidding the price up?
Any feedback is welcomed.
Re: Foreclosure sale questions for the pros - Posted by Ben (NJ)
Posted by Ben (NJ) on July 10, 2003 at 07:09:44:
I’m no sheriff’s sale expert but the few that I’ve been to the opening bid was $100 (by the bank),when
someone bid $200, the bank then bid $169,457.00! Quite a jump!
Minimum Bid… - Posted by JT-IN
Posted by JT-IN on July 09, 2003 at 22:25:23:
Has NO correlation to what the Lender will accept, or where they stop bidding. It is as TKP said, having to do with the deficiency judgment, if the Lender decides to pursue one.
If there was a connection between the minimum bid and the amount that the Lender would accept, I would own more property than Donald Trump… (in theory).
JT-IN
Re: Foreclosure sale questions for the pros - Posted by TKP, Houston
Posted by TKP, Houston on July 09, 2003 at 22:15:13:
S.B. Sometimes the lender will establish both a low and a high bid. Often they will start at the low and bid up if there are other bidders. If they get it a the low bid the deficiency judgement they might obtain against the debtor will be higher. If you do not have the cash to bid at the auction your best bet will be that the lender gets the property at the low price, and you can try to buy it from them afterwards. If the loan has been “securitiezed” (turned into bonds on Wall Street) or for other reasons are is handled through any kind of service company they will probably have so many “loops to jump through” to justify taking a loss that it will take some time before the property is offered for sale. But you should ask the attorney handling the sale if he can refer you to the lender and contact them immediately after the auction if they end up with the property. Good luck. TKP, Houston
Re: Foreclosure sale questions for the pros - Posted by S.B.
Posted by S.B. on July 10, 2003 at 24:27:56:
Thanks for the feedback. If they will not accept my downpayment, and they purchase the property back, I will try tp follow up with the lender. Hopefully the auctioneer will have a referral. If not, who would I present my offer to? There is no REO dept. I was told by the individual in charge of the loan that within a week or two of the auction, the house will be appraised and turned over to a local real estate agent - to basically wait for the sign. Is there a way to intercept it before this happens?
Re: Foreclosure sale questions for the pros - Posted by TKP, Houston
Posted by TKP, Houston on July 10, 2003 at 20:30:17:
SB. You say there is no REO department, but you spoke with the individual in charge of the loan…
That seems to be as good a contact at the bank as you can wish for. You need to let them know that if they deal with you they will not only get a faster result, but also a better one. However, many lenders, and especially the mortgage service companies that take care of “securitized” morgages (those that have been bundled and sold as bonds on Wall Street) have rules in effect that require them to 1) get an estimate of market value from a realtor and 2) sell through a realtor. If this is a small bank (no REO dept) you might get them to by-pass such proceedures. Good Luck. TKP, Houston