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RICH Sep 24th 2015 3:41 am

Buying a forclosure house
 
I had a thread a year ago, here: old thread

This week the court entered a Default on the next door house, which I think means the house will be auctioned in a month or so. (Is that how it goes?)

I am thinking about a lo-ball bid. Anyone done this? How was the process. What would make it a non-starter, economics aside?

Local county web info: online auction

FWIW I bought my house by online bid, from HUD 6 years ago, but am non the wiser how this could/should go.


Thanks All!

Pulaski Sep 24th 2015 3:47 am

Re: Buying a forclosure house
 
The likely first thing that will happen is that the bank owed the money will send their lawyer down to the courthouse (or if I read your post right, on-line) to bid whatever the bank is owed, thereby ensuring than the bank gets to control who gets to buy the house and for how much, and that it isn't "stolen" for a lot less than the anount owed. True low-ball bids rarely succeed in foreclosures where the mortgagee has defaulted.

Tax lien foreclosures can have greater potential for winning with a low-ball bid, depending on how much the tax lien is allowed to increase before the taxing authority forecloses.

RICH Sep 24th 2015 4:33 am

Re: Buying a forclosure house
 

Originally Posted by Pulaski (Post 11756441)
The likely first thing that will happen is that the bank owed the money will send their lawyer down to the courthouse (or if I read your post right, on-line) to bid whatever the bank is owed, thereby ensuring than the bank gets to control who gets to buy the house and for how much, and that it isn't "stolen" for a lot less than the anount owed. True low-ball bids rarely succeed in foreclosures where the mortgagee has defaulted.

Tax lien foreclosures can have greater potential for winning with a low-ball bid, depending on how much the tax lien is allowed to increase before the taxing authority forecloses.

Sounds like a reasonable assumption. So the bid would need to cover the outstanding debt to be viable? Or the bank not paying attention, or wrote it off?

I was thinking a $20k bid max, given the old thread, where I guesstimate the debt, which is also in line with the vacant lot sales last year.

Pulaski Sep 24th 2015 11:03 am

Re: Buying a forclosure house
 

Originally Posted by RICH (Post 11756458)
Sounds like a reasonable assumption. So the bid would need to cover the outstanding debt to be viable? Or the bank not paying attention, or wrote it off?

I was thinking a $20k bid max, given the old thread, where I guesstimate the debt, which is also in line with the vacant lot sales last year.

In virtually all cases the bank has sold the debt, so it is not within the bank's power to just write it off. There will be no harm done in trying a low-ball bid, but it depends entirely on what the bank lent, what it does, and of course who else bids. I would like to try a foreclosure auction one day myself one day, it sounds like fun. :)

scrubbedexpat091 Sep 24th 2015 11:19 am

Re: Buying a forclosure house
 
Just curious is a bank forced sale the same as a foreclosure?

I know it's in Canada but maybe the US does something similar, the house next to the mother in law recently sold but the sign on the real estate sign out front said bank forced sale.

I know the people who lived there didn't own it, the husbands mom did, and she died unexpectedly from a heart attack and paid the mortgage, so I assume that's why the bank forced the sale.

Sold for a nice chunk of change 789,000.

scrubbedexpat097 Sep 24th 2015 12:01 pm

Re: Buying a forclosure house
 
I wish we had tried to buy the foreclosure next to us.

What is it about that house that attracts crazy people? Never fails..3rd one in a row! Mind you looking at what is going on there it may be back into foreclosure again soon:fingerscrossed:

Redwing Sep 24th 2015 12:30 pm

Re: Buying a forclosure house
 

Originally Posted by Pulaski (Post 11756441)
The likely first thing that will happen is that the bank owed the money will send their lawyer down to the courthouse (or if I read your post right, on-line) to bid whatever the bank is owed, thereby ensuring than the bank gets to control who gets to buy the house and for how much, and that it isn't "stolen" for a lot less than the anount owed. True low-ball bids rarely succeed in foreclosures where the mortgagee has defaulted.

You're absolutely correct. The last one I was at, the bank was owed $400,000. I knew 2 of the bidders, and one told me she was going to bid a max of $300,000. The bank was the lone bidder at $400,000.

scrubbedexpat099 Sep 24th 2015 1:10 pm

Re: Buying a forclosure house
 
Happens all the time, Bank buys it back.

RICH Sep 24th 2015 11:58 pm

Re: Buying a forclosure house
 
Disappointing. I just registered on the auction site and a quick search revealed 6 sales this year in my zip code with BoA as the plaintif/bank. All were won by BoA using $100 auto bids. 2 they got for the $100, the others for $100 over the next bidder, but substantially less than the judgement amount, which I suppose what they are owed.

2 more sales are scheduled, so I will watch those. Mine is not listed yet, so a bit more court action to come I suspect.

Interesting though, very e-bay-like.

Pulaski Sep 25th 2015 12:06 am

Re: Buying a forclosure house
 

Originally Posted by Boiler (Post 11756711)
Happens all the time, Bank buys it back.

It's pretty much a required step to get the property registered in the name of the bank so that the bank can sell it.

RICH Oct 6th 2015 2:41 am

Re: Buying a forclosure house
 

Originally Posted by Pulaski (Post 11757232)
It's pretty much a required step to get the property registered in the name of the bank so that the bank can sell it.

Odd thing. I am on the prowl for a disney villa to rent, and I dug up the address of the one Dad rented 10 years ago. Perusing the public records, it was apparently acquired last month at auction, by the HOA for $100 who had a lien for fees, and not the bank with the 250k mortgage... what can one make of that info?

Pulaski Oct 6th 2015 2:48 am

Re: Buying a forclosure house
 

Originally Posted by RICH (Post 11765679)
Odd thing. I am on the prowl for a disney villa to rent, and I dug up the address of the one Dad rented 10 years ago. Perusing the public records, it was apparently acquired last month at auction, by the HOA for $100 who had a lien for fees, and not the bank with the 250k mortgage... what can one make of that info?

The bank wasn't notified and dropped the ball (didn't notice). :eek: ...... I suspect the bank will sue the HOA for the value of the mortgage, so the HOA had better make sure they sell it for at least that much!

scrubbedexpat099 Oct 6th 2015 2:51 am

Re: Buying a forclosure house
 
Somebody screwed up?

username.exe Oct 6th 2015 3:05 am

Re: Buying a forclosure house
 

Originally Posted by Pulaski (Post 11765682)
The bank wasn't notified and dropped the ball (didn't notice). :eek: ...... I suspect the bank will sue the HOA for the value of the mortgage, so the HOA had better make sure they sell it for at least that much!

:lol:

So, the owner just got fed up with getting whacked with HOA fees and presumably various fines for not doing whatever they wanted them to do?

Even so, this could turn out to be a lucrative business for a local HOA.
If they sell for a profit, what do they get to do with the funds? Are they under obligation to make that information publicly available?

scrubbedexpat099 Oct 6th 2015 3:10 am

Re: Buying a forclosure house
 
A friend of mine was fined by her HOA $100 for over watering her plants.

RICH Oct 6th 2015 3:13 am

Re: Buying a forclosure house
 

Originally Posted by Pulaski (Post 11765682)
The bank wasn't notified and dropped the ball (didn't notice). :eek: ...... I suspect the bank will sue the HOA for the value of the mortgage, so the HOA had better make sure they sell it for at least that much!

Is that realistic? Does the bank get a second crack? They instigated the action I suppose. and lost...

This is the scenario I was thinking about to nab the house next door from the bank!

Pulaski Oct 6th 2015 3:15 am

Re: Buying a forclosure house
 

Originally Posted by username.exe (Post 11765692)
:lol:

So, the owner just got fed up with getting whacked with HOA fees and presumably various fines for not doing whatever they wanted them to do?

Even so, this could turn out to be a lucrative business for a local HOA.
If they sell for a profit, what do they get to do with the funds? Are they under obligation to make that information publicly available?

For that to happen there have to be multiple points of failure.

If it was a vacation rental, I would say that the managing agent dropped the ball (did not pay, or did not notify the owner), or notified the owner, who failed to send payment.

I still think the bank will try to come after the HOA, though whether they would win in court may be a moot point as I doubt the HOA will have a deep enough pocket to fund a legal action they might lose when they're just fighting to keep a windfall gain. In other words the bank's lawyer may just intimidate the HOA into settling.

scrubbedexpat099 Oct 6th 2015 3:22 am

Re: Buying a forclosure house
 
First thing would be if the HOA charge is valid, maybe not.

RICH Oct 6th 2015 3:26 am

Re: Buying a forclosure house
 
If it makes a difference, it was not just the hoa fees delinquent, the mortgage was too, if it was not clear.

scrubbedexpat099 Oct 6th 2015 3:35 am

Re: Buying a forclosure house
 
HOA are not going to do that for $100.

RICH Oct 6th 2015 3:52 am

Re: Buying a forclosure house
 

Originally Posted by Boiler (Post 11765709)
HOA are not going to do that for $100.

I wouldn't do that for $100 either. (What are we talking about?)

scrubbedexpat099 Oct 6th 2015 3:58 am

Re: Buying a forclosure house
 
I thought the lien was $100 Duh

RICH Oct 6th 2015 4:12 am

Re: Buying a forclosure house
 
OK. The HOA lien for fees is an unspecified amount, presumably inferior to the $250k mortgage.

$100 I mentioned was the sale price at auction for the property last month.

edit - it was specified - about $6k

sir_eccles Oct 6th 2015 4:16 am

Re: Buying a forclosure house
 
In trying to find a link about hoa insiders being in on selling off houses cheap with hoa liens (which I couldn't find) I found a link about the superiority of liens. Hoa liens being quite superior apparently.

What happens to superior liens during foreclosure? • Mortgage Insider

Tarkak9 Oct 6th 2015 4:21 am

Re: Buying a forclosure house
 

Originally Posted by RICH (Post 11765679)
Odd thing. I am on the prowl for a disney villa to rent, and I dug up the address of the one Dad rented 10 years ago. Perusing the public records, it was apparently acquired last month at auction, by the HOA for $100 who had a lien for fees, and not the bank with the 250k mortgage... what can one make of that info?

It depends on (the) state laws and foreclosure laws. Many states, HOAs retain extremely senior rights to a property in its community, even over that of a bank (and basically are second to Tax on the totem pole). Therefore they do infact have the right to foreclose on the property for unpaid dues; because of that, all they have to do, like normal procedure, is notify subordinate interest holders of their foreclosure, but not be obligated to accept pay off of their lien from the junior position holders, who do run the risk of being s.o.l. (Bank). Often though, they will go ahead and be paid by the bank as its easier to get their owed funds that way rather than go through the foreclose procedures. There may also be state laws as to how much an HOA is allowed to capitalize from such sale after foreclosure. The bank probably will sue somebody, probably not the HOA because, afterall, it was a legit foreclosure and sale, but the foreclosed homeowner as they are still owed money from them by means of the deed of trust, so such judgement would probably continue to follow them rather than they be forgiven on the note. It would be very common to see bankruptcy in such extreme situations.

RICH Oct 6th 2015 4:35 am

Re: Buying a forclosure house
 

Originally Posted by Tarkak9 (Post 11765721)
It depends on (the) state laws and foreclosure laws. Many states, HOAs retain extremely senior rights to a property in its community, even over that of a bank (and basically are second to Tax on the totem pole). Therefore they do infact have the right to foreclose on the property for unpaid dues; because of that, all they have to do, like normal procedure, is notify subordinate interest holders of their foreclosure, but not be obligated to accept pay off of their lien from the junior position holders, who do run the risk of being s.o.l. (Bank). Often though, they will go ahead and be paid by the bank as its easier to get their owed funds that way rather than go through the foreclose procedures. There may also be state laws as to how much an HOA is allowed to capitalize from such sale after foreclosure. The bank probably will sue somebody, probably not the HOA because, afterall, it was a legit foreclosure and sale, but the foreclosed homeowner as they are still owed money from them by means of the deed of trust, so such judgement would probably continue to follow them rather than they be forgiven on the note. It would be very common to see bankruptcy in such extreme situations.

This is the most eye-opening thing I have read in a long time. Thank you.

RICH Oct 21st 2015 7:38 am

Re: Buying a forclosure house
 
A 100k house came up in my neighborhood for auction tomorrow - I just put in a $200 bid. So exciting!

Pulaski Oct 21st 2015 11:22 am

Re: Buying a forclosure house
 

Originally Posted by RICH (Post 11776161)
A 100k house came up in my neighborhood for auction tomorrow - I just put in a $200 bid. So exciting!

:fingerscrossed: :lol:

RICH Oct 21st 2015 5:14 pm

Re: Buying a forclosure house
 

Originally Posted by Pulaski (Post 11776272)
:fingerscrossed: :lol:

Sold for 80k to the bank. Serious bids started at 40k.

mrken30 Oct 22nd 2015 3:10 pm

Re: Buying a forclosure house
 

Originally Posted by Boiler (Post 11765714)
I thought the lien was $100 Duh

I had a $400 lien put on my house by a contractor. they ended up dropping the lien after we had both paid a few thousand in attorney fees.

This sort of stuff should really go through small claims. Welcome to America.

It's very easy to lien a property, and yes, some HOAs will put on a lien for $100

mrken30 Oct 22nd 2015 3:19 pm

Re: Buying a forclosure house
 

Originally Posted by RICH (Post 11776592)
Sold for 80k to the bank. Serious bids started at 40k.

Would you buy a 100k house unseen for 80k? Personally I would pay the extra 20k and have the ability to have an inspection. It doesn't take much in repairs to add up to 20k.

Anian Oct 26th 2015 3:52 pm

Re: Buying a forclosure house
 

Originally Posted by mrken30 (Post 11777237)
It's very easy to lien a property, and yes, some HOAs will put on a lien for $100

Liens cost a few hundred dollars, so it's not worth doing for less than a few thousand, and you can't even get the money until the house is sold. That never rules out what little Hitlers who run HOAs will do though.

mrken30 Oct 26th 2015 4:00 pm

Re: Buying a forclosure house
 

Originally Posted by Anian (Post 11779718)
Liens cost a few hundred dollars, so it's not worth doing for less than a few thousand, and you can't even get the money until the house is sold. That never rules out what little Hitlers who run HOAs will do though.

After a lien is established, they can then force a foreclosure. They can add the lawyers costs to the lien. So what starts off as $100 lien turns into a $3000 lien and then they foreclose.

RICH Oct 30th 2015 1:50 am

Re: Buying a forclosure house
 
I almost got one for $200 today! Wells Fargo out bid me by $100. :rolleyes:

I had bid $200 2 days ago, when "plaintiffs max bid" was hidden. Yesterday, PMB appeared, as the judgement amount ($55k). I wonder if it was in response to my bid, or just them dealing with "today's business".

In the last year, the lowest non plaintiff successful bidder was $1000, an apartment/condo assessed at $17k:ohmy:

Dixie101 Nov 2nd 2015 1:18 pm

Re: Buying a forclosure house
 
I'm fascinated about making offers of a few hundred dollars! I bought a foreclosure, as a holiday home, in Florida at the end of last year. It was advertised for $40000 and was bank owned. I got it for $34000. In terms of price history, it had been sold around 2005 for $85K and when it went to foreclosure in 2014 there was $115K outstanding on the mortgage.
So there are bargains to be had, though mine has already more than doubled in value due to a significant local upturn in property prices.

RICH Nov 3rd 2015 12:00 am

Re: Buying a forclosure house
 

Originally Posted by Dixie101 (Post 11784625)
I'm fascinated about making offers of a few hundred dollars! I bought a foreclosure, as a holiday home, in Florida at the end of last year. It was advertised for $40000 and was bank owned. I got it for $34000. In terms of price history, it had been sold around 2005 for $85K and when it went to foreclosure in 2014 there was $115K outstanding on the mortgage.
So there are bargains to be had, though mine has already more than doubled in value due to a significant local upturn in property prices.

Hi! I am toying with these foreclosures so far. It appears highly unlikely I would snap one up for hundreds, but nothing to lose by trying!

Bank owned auctions are slightly different. I bought my house at auction (HUD owned actually) That seems to be one step after the foreclosure auction, where the bank almost inevitably gains possession.

My HUD auction allowed for inspections of the property etc. The foreclosure auction does not. In fact many/most appear to be occupied property, so eviction would come into play. I am trying to learn by sticking my toes in.
From what I have seen, there are some hardcore investors bidding - half a dozen names come up frequently, with relatively big bucks bids.

Then again, there are about 150 properties a week on offer just in my county.

scrubbedexpat091 Nov 3rd 2015 5:56 am

Re: Buying a forclosure house
 
House next door to the MIL was a foreclosure, no auction though, bank put it on the market as is where is and got pretty close to market value.

The occupants were less then willing to vacate though, so the bailiffs and police assisted them in leaving.

RICH Mar 2nd 2016 1:21 am

Re: Buying a forclosure house
 
Dragging this thread up for an update. This week the judgement was (finally) made and the auction is set for April 8th. Judgement amount is $230k. Assessed value is $67k.

I don't think my $20k will cut it. Still watching with interest though.

mrken30 Mar 2nd 2016 5:17 am

Re: Buying a forclosure house
 
I recently found a new auction site that may be of interest

https://www.homesearch.com/realestat...beach-fl-33062

RICH Apr 9th 2016 1:52 pm

Re: Buying a forclosure house
 
So the auction went ahead yesterday. Someone bid up to $85k, but the bank still won!
The tenant/squatter moved out the day before. Hopefully it won't be vacant too long, the back yard is already getting jungle-like.


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