Judicial Sales - Posted by james

Posted by David Krulac on October 05, 2004 at 20:15:15:


Judicial Sales - Posted by james

Posted by james on October 04, 2004 at 14:15:58:

Has anyone bought homes at Judicial sales? WHat are the risks? The reason I ask is that I am looking to buy another property in my area and I noticed under the Judicial sales section of my local newspaper a home in my neighborhood. The price owed to the bank was 94K. I know the values of the properties in my area very well and I know that this home can easily sell for 275-300K. On the outside it looks to be in good condition. Even if it totally needed to be remodeled on the inside, it would only cost 30K-40K. The homes in my neighborhood were all built in the mid 1950’s and they built 3 different models of split quad levels. I also found out that the owner bought this home for 140K 7 years ago. So the 94K owed is about right. My question is: what other costs may I encounter; Like other liens, tax, irs, mechanics? I can go to the cook county tax office and find out if any back taxes are owed pretty easily.
But,how would I find out if any irs, mechanics or other mortgage liens are on the property?
I do need to find this information out BEFORE I decide to go and bid on this property.
Also, how many people usually show up for these sales?
I live in Melrose Park, IL. which is part of Cook County (largest county in IL).
I know that I can go to the county clerk’s office to find out about any other mortgage liens on the property, but will the records show irs or mechanics liens too??
I wrote a letter to the owner to see if he would sell his home to me, but he never responded.
If a person is faced with losing his home to foreclosure, can’t he just declare Bankrupsy 7 in order to save his home???
Is their anyone in the Chicago, IL. area that has legal or personal experience with buying at Judicial sales that can help me out?


Re: Judicial Sales - Posted by domineaux_TX

Posted by domineaux_TX on October 05, 2004 at 08:53:37:

You asked a bigger questions than most of us want to answer in a posting.

A judicial foreclosure wipes all liens and encumbrances. In effect, the property went to foreclosure and the judge sorted out the issues and what is left is left. It is probably the cleanest way to buy any distressed property.

Usually, if a property has gone through the judicial foreclosure process you can still have people who didn’t take care of their business and try to get the new owner to pay them. HA! I had a city try to charge me for cutting the grass on a judicially foreclosed property for 7 years mowing charges. It was an enormous amount of money, respective to what I paid for the property. I still had to get a lawyer to quash their charges.

Distressed sale purchases all have their issues. Troubled properties always seem to have attorneys, judges and creditors as a part of the things you’re going to have to deal.

Keep the word “troubled” clearly in mind as you try to transact for “troubled” properties, it is important to be mindful…you might need to just walk away.

Re: Judicial Sales - Posted by Kevin IL

Posted by Kevin IL on October 04, 2004 at 15:09:42:

Buying at the auction is only risky if you DON’T do your homework. Run a title report on the property to uncover any additional liens. This will tell you if the $94k lien is senior or junior. It should also turn up any IRS liens. Also, check with the property tax collector to see if there are any unpaid taxes. The winning bidder at auction is responsible for the property taxes.

Intercounty Judicial Sales will only sell the property after the bankruptcy is completed or a relief of stay has been issued.

I’d be knocking on the homeowners door trying to work out a deal. Properties with this much equity rarely make it to sale.

Re: Judicial Sales - Posted by domineaux_TX

Posted by domineaux_TX on October 05, 2004 at 20:52:57:

Sorry, I got ahead of myself. I was thinking of ad-valorem tax sale judicial foreclosures in Texas.

All the liens are settled up during the tax foreclosure legal process.

Re: Judicial Sales - Posted by rehabber

Posted by rehabber on October 05, 2004 at 16:21:57:

“A judicial foreclosure wipes all liens and encumbrances”
I wish it were this simple, but it is not…

Bank A has 1st lien on a house, bank B 2nd lien.
Bank B forecloses…You bid and win…
congratulions, you just paid for the property with
your bid, but you now ALSO have to pay off the
mortgage from Bank A.

According to Title law, there is a whole list of
priorities of liens regarding a foreclosure sale…
Does a judgement lien wipe out any mortgage lien?..
some cases yes, some cases no. What about tax liens,
mechanic’s liens, IRS liens, municipal liens, other
statutory liens (homeowner’s assoc liens etc) etc,
etc. - are they wiped out? - maybe yes, maybe no,
depending on order and legal priority of the liens.

A blanket statement that "“A judicial foreclosure
wipes all liens and encumbrances” can not be made.

Re: Judicial Sales - Posted by rehabber

Posted by rehabber on October 06, 2004 at 21:18:09:

We have a similar ‘free and clear’ tax sale here in PA,
where darn near all other liens (minus IRS liens) are
wiped out at the sale. My other post regarding
all liens not being wiped out was regarding mortgage
foreclosure auctions.