I’m fairly certain the second wouldn’t do that. Just threw me when the lady who handles the sales (and has forever) says they might show up and bid. She is very familiar with everyone, and I figured she knows what’s up. Maybe I just read into it too far, and it was more of a MIGHT than just might. 90% of these go back to the bank if they make it to the sale.
As far as bankruptcy, too late. They’ve been through ch 7. The only hope now is the 1st doesn’t want to own this one, and is for some reason willing to take a discount a month before the sale. What’s their incentive? The longer this goes, the more I’m thinking I need to wait until this goes REO, and grab it then.
FMV is $170K, easily. That would get it sold in less than 30 days. Place was bought for $160K in 1995, and has been well maintained. The first will probably bid about what they’re owed, and no one is going to risk it at the sheriff’s sale for only $30K potential. Not when this guy has other liens popping up, and his ex wife, I found out, might be creating more. He got a Federal Tax lien attached to his vehicle (no clue how they do that), and who is to say that the feds don’t have one they’re about to stick on the house.
I thought I had researched this thoroughly. Actually, I had. The thing is, things just keep piling on. I might have to buy this one Jan 4th, after the sale. I’m still going to follow through, talk to the banks, etc. Maybe I’ll be first in line once they own it. My interest before the sale, however, and this much risk…dwindling quickly.
I am currently talking with the owner of a foreclosure that is priced about $30K below FMV, no repairs needed. They’ve already gotten the judgement, and it goes to sale Jan 3rd, if we don’t get something done before then.
First mortgage is the one who foreclosed ($130K), and the second ($10K) has now become a “Cross Claim Defendant”. I understand that they are trying to recoup their $10K, but the lady who handles the sheriff’s sale said that they might show up to bid. What? They’re going to throw $130K of the banks $$ on the line to hope they can recover their 10K? I didn’t think the bank would take that type of risk.
For the record, both lenders are small local banks, and probably know that this place has some equity. I had planned on contacting both lenders for a possible shortsale, or buying the note. I figured the 2nd should be motivated to get something before the sale. Maybe not? But, they still might not get anything, even as a cross claim defendant, right?
If someone who has “been there, done that” can give me some insight on what they might be thinking, that would be ultra helpful.
Many banks will not accept a “Deed in Lieu of”… There is an element of considerable risk in doing so, for a Lender who has a strong 1st mtg poistion…
If a “Deed in Lieu” is accepted, there can be some last minute liens filed, which are not currently showing up, and if the foreclosuse is completed as planned, will have no impact. Once the Lender accepts the “Deed in Lieu” the foreclosure is dismissed and all the matters of record flow with the property… Should there be a large lien, then the Lender now has the lien…
Nate has stated an obvious reason why they would not accept the deed, and my angle is less obvious, but no less of a factor or risk.
I suppose that makes sense. I was thinking that they would have wanted to get it done a year ago, when he offered, but hadn’t thought through the considerable risk they would inherit.
I am thinking the first won’t give much thought to a shortsale now, as they’ve already been in this for a year, and will take title Jan 3rd anyway. So what about the second becoming a clossclaim defendant? I understand now what a crossclaim defendant is, just don’t know how they get paid for their interest.
By the way, there is enough equity here that I wouldn’t need a shortsale for this to work out, just figured I’d go for it anyway.
Posted by Nate(DC) on November 11, 2002 at 15:46:19:
They might not get paid. If they don’t show up and bid at least the amount of the first and second, their lien will be wiped out and they are likely to end up with nothing. If they do show up and bid the amount of the first and second, they will end up with the property unless outbid.
That all makes sense, and I had figured that’s the way it would go. I guess I just can’t see them throwing that much $$ out to protect their interest. Who knows though, I haven’t been able to follow logic when dealing with banks.
Should have an authorization to release info from seller tomorrow. I’ll be able to quit guessing, and find out what the bank is thinking. Now that I know all this, I figure I’ll start by offering $500. That should get a good laugh.
Posted by Terry Yoast on November 11, 2002 at 20:16:31:
In my opinion, there is absolutley no way that the 2nd mortgage holder would show up at the sale and bid.I bet that no one would even bid the upset price on the first mortgage if it made it to the sheriff sale.
If I were in this position, I would have the owner write a hardship letter to the banks telling them that they have no other option but to claim “bankruptcy”, if they do not entertain a short sale.