How does bankruptcy filing affect a foreclosure - Posted by scott w.
Posted by scott w. on July 23, 2003 at 11:57:30:
I am a newbie investor. I have a number of questions regarding judicial foreclosures:
- Yesterday, I met with a homeowner whose house is scheduled to go to auction next week. She informed me that she is filing for bankruptcy today and consequently isn’t interested in selling me her house. How does the bankruptcy filing affect the foreclosure process? Is the debt relieved or just “reorganized”?
What role can an investor play to help “solve” the homeowner’s problem? How should the investor remain involved/monitor this situation to potentially set up a transaction?
Assuming that a house goes to auction and the winning bid exceeds the foreclosing lienholder’s judgment amount, who receives the “excess” monies? Is it safe to conclude that once all lienholders are satisfied that the equity gets paid to the homeowner?
Finally, what is the benefit of winning a foreclosure auction brought by a second mortgage holder or for that matter any lienholder not in 1st position?
Since the auction is scheduled for next week any advice or insights on how to approach it will be greatly appreciated. Thanks in advance.