Posted by JT-IN on June 01, 2006 at 18:33:16:
Joe:
I am way more empathetic to the plight of the displaced homeowner… I charge them a small snippet of the proceeds… nothing like a 50/50 deal. They need the money, I don’t… and it is distributed pretty much in that pro-rata.
Just one of the services that a nice guy in the RE biz can offer…
JT-IN
Foreclosure/Sheriff’s Sale - Posted by Shad-MN
Posted by Shad-MN on May 30, 2006 at 14:45:29:
I have also posted this to the legal forum just in case someone there has some good advice too.
My question is if your house was foreclosed on and at the sheriff’s sale the amount of purchase is more than what you owe. What happens to the excess funds? So hypothetically speaking you owe 140 and it sells for 155 at the sale. Any assistance is greatly appreciated.
Scenario is that the house my ex-wife and I had went to foreclosure and it appears the sale was for more than what we owed on it, but now have a possible chance for the local realtor to sell it but that offer is less than what the sale posted for. So thinking we might be better off to keep the sheriff’s sale price versus the other as with the realtor fees and what not we’d probably end up having to pay extra funds.
Re: Thank you - Foreclosure/Sheriff’s Sale - Posted by Shad - MN
Posted by Shad - MN on June 01, 2006 at 07:53:18:
I wanted to say Thank you to those that have read and replied. I appreciate your comments/advice. Just as one more piece of info, this happened over a divorce. My ex-wife got me pretty good so I returned the favor with the house. We were both on title however only the mortgage was in her name. So no financial responsiblity however all the ownership. Of course after the fact I regret doing that to her but it felt good at the time. 
Thanks again!!
Shad
MN - 1 Yr. Redemption - Posted by JT-IN
Posted by JT-IN on May 31, 2006 at 09:42:49:
Shad:
Hard to say exactly comparing the sheriff sale net proceeds to that of the offer from Realtor. You will have to do some specific homework with the Sheriff or Court Clerk, or whoever would administer the completion of this sale, and determine the final amount remaining in overage.
There are a couple of other things to consider in your case. MN allows for a 1 year redemption period, so you may have additional time to continue to try to sell at a higher price still. You could also go back to the Realtor, after knowing the exact net due from the sheriff sale, after redemption has run it’s course, and attempt to negotiate your buyer up to that amount of net, or close.
The other thing is, if you redeem and pay off the lender thereby discharging the foreclosure action, the mtg should ultimately show up on your credit report as paid in full. Not that this will erase the fact that a foreclosure was filed and late payments existed, but that it wasn’t completed. Maybe this matters and maybe it doesn’t but if you haven’t been totally ruined financially and filed a ch 7, you may want to consider the down-the-raod impact of avoiding the foreclosure completion.
You or your Realtor or Title Agent will also need to obtain a valid payoff amount from the Lender or the court, to be sure what the net effect is from the offer amount from the Realtor. Sometimes these payoffs can vary and possibly the lender will still settle for something less, to avoid the 1 yr wait, to settle the acct now.
Finally, you should evaluate the effect of a bird in the hand now, maning a sale by the Realtor and closing where you receive funds in 30 days, versus receiving whatever the amount of overage ends up to be a year or more out from now, when you obtain funds from the court/sheriff’s overage.
Just the way that I view things…
JT-IN
Check out the final account… - Posted by lukeNC
Posted by lukeNC on May 31, 2006 at 08:45:52:
We have a final account, final report of the foreclosure auction that is filed by the trustee/sheriff depending on who does the sale. That will state whether there was an excess and where it went.
Re: Foreclosure/Sheriff’s Sale - Posted by NJDave
Posted by NJDave on May 30, 2006 at 18:24:14:
I suppose each state has its own policy with regard to excess proceeds. Many states have an escrow for ‘excess funds’ which are deposited after all lienholders (including costs of sale) are paid. The former homeowners must make application to the administrator of the escrow, and certify all lienholders were satisfied from proceeds… It’s a process. But, in many jurisdictions, excess proceeds are payable to the former homeowner.
Re: Foreclosure/Sheriff’s Sale - Posted by Max-Va
Posted by Max-Va on May 30, 2006 at 18:13:48:
About the price, any overage pays foreclosing costs, attorney fees, sheriff fees, and then pays any liens recorded, if everything is paid in full any remaning balance goes to seller. It is very rare that it happens.
I don’t know about MN foreclosure laws. It may have a redemption period, check on your laws there.
The way it works in Virginia. At the sale you cease to own the property. It belongs to the lender or high bidder. No way to list and sell a property you don’t own. You may live there until you are evicted, about 3 weeks or so
Re: Foreclosure/Sheriff’s Sale - Posted by jc
Posted by jc on May 30, 2006 at 17:12:55:
All proceeds go to the lenders and attorneys involved. It is almost a definite that you will not see any proceeds in the foreclosure sale after everyone has taken a cut of the proceeds.
Just a side note, you always want to avoid foreclosures whenever possible, even if it means you sell the home via short sale and make nothing because it hinders your chances of getting a loan in the future.
Re: Foreclosure/Sheriff’s Sale - Posted by Joe Kaiser
Posted by Joe Kaiser on May 31, 2006 at 01:59:05:
I’m willing to bet the overage doesn’t pay foreclosing costs, attorney fees,
sheriff fees. Got a feeling that stuff gets paid before even the lender.
Joe
Re: Foreclosure/Sheriff’s Sale - Posted by Max-Va
Posted by Max-Va on May 31, 2006 at 08:16:04:
Joe, I agree 100%. I don’t have the experience you have but I know a few people that I watched go thru the process and they got zero, even though the sale brought just under 10K above amount owed. The fees are ridiculous $400+ for each time it is placed newspaper. Here they run the notice 5-6 times prior to sale.
Don’t be such a stranger to the board. I miss seeing your insightful postings.
Overage to owner of record - Posted by JT-IN
Posted by JT-IN on May 31, 2006 at 09:28:42:
Max: (of course it doens’t work like the example below, but that is how it is in Ohio).
Yes, it is rare that there is an overage amount, but it happens. I have a case now for a property that I bought at SS, where there is a $ 26,484.20 overage amount. There is a 2nd mtg holder that did not answer the judgicial complaint, and if they get off their duff, there will be entitled to part of that amount. The owner will be entitled to the balance of the funds, or the whole amount if the 2nd doesn’t object when the owner files his petition to collect said funds.
I have seen that happen a couple of times, where there was a valid Jr. mtg that did not repond during the suit, and their mtg is then desolved. However, their Note and indebtedness is not desolved, so they can still claim any part of an overage, if it exists. So any party having an interest in the property prior to the foreclosure must be notified that another party is making a claim to the excess funds, and like a foreclosure complaint itself, they all have 20 or 30 days to answer an objection and make a claim to the funds. No claim or answer results in approval of the motion to distrubute funds. So the former owner, under my guidance will be filing his own motion, pro se, for the balance of the funds. We’ll see what happens. He sure could use the 26K, or even part of it… whcih he will surely get 10K minimally.
The distribution of funds from the sale goes like this:
1 Clerk of court fees for administering the sale, including Sheriff’s poundage (commission, graft),
2) unpaid property taxes and assessments,
3) Cost to payoff the secured mtgs that were found to be valid in the complaint, which includes Attys Fees, which includes advertising costs for sale,
4) To the Clerk of coruts, the balance of the sale proceeds in the amount of $ 26,484.20, to hold pending further order of the court.
Hope that example helps…
JT-IN
Re: Overage to owner of record - Posted by Joe
Posted by Joe on May 31, 2006 at 10:27:37:
JT, if the 2nd figures it’s a loss because they haven’t been paying attention then why not buy their position from them and file for the overage yourself? If you could buy it for $2k, you could turn that into $22k and have a 1000% return.
Re: Overage to owner of record - Posted by JT-IN
Posted by JT-IN on May 31, 2006 at 10:38:15:
Joe:
I’ve been doing this a while, and that is always certainly one of the things that we try to get accomplished. Those cases are easy money, and like stealing, which are my favorite kind.
HOWEVER, and there often times seems to be a however, many lenders aren’t interested in selling their position; period… no way, no how. It makes no sense, but this is the way it is by charter for some lenders. For the ones that will, and do, I would have already owned that mtg, and yes, would be filing for the overage.
In this case, since the Lender is too big to get out of their own way, they may very well miss the wagon before it leaves the barn… and if it happens that way, don’t think for a minute that I won’t be helping the former homeowner to orchestrate that end run on them, and it will be financially beneficial to me if the lender doesn’t answer the bell in this case.
AS you state, the first play is always to buy the position, but many just aren’t in tune enough to play nice in that area… When they don’t play with me, then they play AGAINST me… That simple.
JT-IN
Re: Overage to owner of record - Posted by Joe
Posted by Joe on May 31, 2006 at 18:30:37:
Good reason.
What do you sign with the homeowner then? An agreement stating a 50/50 split of the overage?