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jbelman
254 Posts |
 Posted - 08/06/2008 : 09:43:33 AM
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Hello Guys,
I am going to be going to a trustee sale tommorow at the court house. This will be my frist time going. I have a couple of questions and doubts.
What should I expect to see ? More investors etc...
Am I suppose to bring Cashiers Check in order to bid etc.. or proof of funds letter ?
Generally what is the bank willing to sell the property for example if the property before the truste sale date owed 395,000 First Lien and a Second lien of 75K . What are their intentions of getting.
Maybe alot im asking but a general overview would be nice. Thank you |
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rtrefflich
3387 Posts |
Posted - 08/06/2008 : 09:46:25 AM
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| If the property is somewhat reasonably priced you will see a few people, most banks though are pricing the initial bid too high for an investor and then buying the home back themselves at sale as no one bids on it. |
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nowbroker
1361 Posts |
Posted - 08/06/2008 : 10:02:04 AM
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I have bought homes at foreclosure sales- this is what I have learned.
Call the trustee to find out the opening bid (this can be far lower than the amount owed) You will need a cashier's check made out to the trustee in your hand at the auction. Get a check for the opening bid, then a couple of smaller checks if you are willing to pay more (they will always take more, but it will take time to get your money refunded) You will not get a deed until 7 to 10 days later since the borrower can file bankruptcy up to the last minute and make the sale invalid (do not spend money on the house until you get the deed in your hand). Some areas have an automated bankruptcy line that you can call the morning of the sale to see if the owner did a banko (if so do not bid, a waste of time). Make arrangements for insurance in case the house has a fire ASAP. Is the forclosure for the 1st mortgage or the 2nd? If it is for the 2nd, you will need to pay off the 1st lien. If the foreclosure is for the 1st mortgage, the 2nd lien holder may or not may not show up for the bid. I bought a home that the 2nd did not show up at the sale. Check the county records for tax liens, or get a quick report from a title report so you know all the liens before you bid. Good luck! |
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jbelman
254 Posts |
Posted - 08/06/2008 : 11:41:46 AM
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quote:
Originally posted by nowbroker
I have bought homes at foreclosure sales- this is what I have learned.
Call the trustee to find out the opening bid (this can be far lower than the amount owed) You will need a cashier's check made out to the trustee in your hand at the auction. Get a check for the opening bid, then a couple of smaller checks if you are willing to pay more (they will always take more, but it will take time to get your money refunded) You will not get a deed until 7 to 10 days later since the borrower can file bankruptcy up to the last minute and make the sale invalid (do not spend money on the house until you get the deed in your hand). Some areas have an automated bankruptcy line that you can call the morning of the sale to see if the owner did a banko (if so do not bid, a waste of time). Make arrangements for insurance in case the house has a fire ASAP. Is the forclosure for the 1st mortgage or the 2nd? If it is for the 2nd, you will need to pay off the 1st lien. If the foreclosure is for the 1st mortgage, the 2nd lien holder may or not may not show up for the bid. I bought a home that the 2nd did not show up at the sale. Check the county records for tax liens, or get a quick report from a title report so you know all the liens before you bid. Good luck!
It has two Mortgage Liens which are from Greenpoint now there are three other liens which belong to myself which where put 9 months. My liens IM assuming will get wiped out what do you guys think. |
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nowbroker
1361 Posts |
Posted - 08/06/2008 : 11:46:36 AM
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| Right, your liens are toast. Is the sale tomorrow for the 1st mortgage or the 2nd mortgage? |
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socalusa
267 Posts |
Posted - 08/06/2008 : 12:09:45 PM
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Just don't show up looking totally prepared to bid on that particular property. Be quiet and don't talk to other people who are present at the auction. Cover up your paperwork and don't let anybody know which auction you're there for.
Have you heard of the "40 Thieves"? They are the people standing around looking for people who have done their homework, have looked at the property, have checked on the liens, and have made sure that the deal is solid deal.
They would just over bid you by a few hundred dollars, laughing all the way to the bank and at all your efforts invested in your research.
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lucky1s
3614 Posts |
Posted - 08/06/2008 : 12:46:37 PM
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| Dont you have to pay all cash if you buy at the courthouse steps? |
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jbelman
254 Posts |
Posted - 08/06/2008 : 12:48:13 PM
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quote:
Originally posted by lucky1s
Dont you have to pay all cash if you buy at the courthouse steps?
My understanding is they give you 15 days if not more but again.. Its my first time anybody want to answer this ...:) |
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ML
2999 Posts |
Posted - 08/06/2008 : 12:58:41 PM
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If you're going to the Courthouse, you're going to the wrong place! A "sale" will take place in name only. The first mortgagee (who I assume is forcing the sale) will bid the exact amount owed on the first mortgage. Even if this is well above the "actual" value of the property. The lenders do this for many reasons, but primarily it's for accounting purposes, so they can account for the loss.
The first mortgagee will have all the subordinate liens exstinguished, and will then have (relatively) clean title and they can then proceed to remarket the property thru their REO department.
If you've been left holding the bag, I'm sorry, you can always seek a default judgment, which shouldn't be too hard to get given the circumstances, res ipso loquitor. |
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jbelman
254 Posts |
Posted - 08/06/2008 : 1:01:04 PM
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quote:
Originally posted by ML
If you're going to the Courthouse, you're going to the wrong place! A "sale" will take place in name only. The first mortgagee (who I assume is forcing the sale) will bid the exact amount owed on the first mortgage. Even if this is well above the "actual" value of the property. The lenders do this for many reasons, but primarily it's for accounting purposes, so they can account for the loss.
The first mortgagee will have all the subordinate liens exstinguished, and will then have (relatively) clean title and they can then proceed to remarket the property thru their REO department.
If you've been left holding the bag, I'm sorry, you can always seek a default judgment, which shouldn't be too hard to get given the circumstances, res ipso loquitor.
But If im interested in purchasing at the trustee sale would that be an option regardless of the sales price or only REO ? |
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ML
2999 Posts |
Posted - 08/06/2008 : 1:17:07 PM
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quote:
Originally posted by jbelman
quote:
Originally posted by ML
If you're going to the Courthouse, you're going to the wrong place! A "sale" will take place in name only. The first mortgagee (who I assume is forcing the sale) will bid the exact amount owed on the first mortgage. Even if this is well above the "actual" value of the property. The lenders do this for many reasons, but primarily it's for accounting purposes, so they can account for the loss.
The first mortgagee will have all the subordinate liens exstinguished, and will then have (relatively) clean title and they can then proceed to remarket the property thru their REO department.
If you've been left holding the bag, I'm sorry, you can always seek a default judgment, which shouldn't be too hard to get given the circumstances, res ipso loquitor.
But If im interested in purchasing at the trustee sale would that be an option regardless of the sales price or only REO ?
Yes and no.
If it were a bona fide sale, ie. the price of the property was Much more than the outstanding balance, you or any other successful high bidder would be the presumptive buyer. This assumes that the first mortgagee were made whole (outstanding first mortgage, interest, collection, legal, taxes, water, etc.).
The subordinate mortgagees can also bid to protect their positions, however few second mortgagees will invest the money necessary to recoup a 10% or 20% second mortgage. If, however, the second mortgage was 50% LTV, you can bet they would be there bidding.
If the bank "buys" back the property at the sale, this is the time to make your interest known to whomever conducts the sale. S/he will put you in touch with the person at the bank who handles the REO, and you start from there. I know it's not much to go on, but it's something, and you might get a leg up on other interested parties. |
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nowbroker
1361 Posts |
Posted - 08/06/2008 : 1:49:48 PM
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With the current market, many lenders are accepting less than what is owed on the mortgage AT THE TRUSTEES SALE. Lenders know many times if they are underwater. This is why you need to call and find out the opening bid.
You will need a cashier's check to buy at the county courthouse steps for any sale I have been to. You may have to show the auctioneer your check(s) to prove funds to bid. They may have up to 15 days to deliver the deed because of what I mentioned earlier (bankruptcy filing). |
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