Determining bank fees/atty costs BEFORE Foreclosure Auction
Looking for intel on how to find out EXACTLY what the bank's credit bid will be at foreclosure auction.
I see the judgement amount listed in the case filing. After attending several auctions I know the actual amount the lender bids includes fees + attorney costs. So is the judgement is for, say, $175k, the actually amount of the bid is usually somewhere in the $185k-ish range.
I'm bringing multiple bank checks, but I would love to have 1 for just $100 more than the actual bank bid instead of guessing. (referees seem to go in $100 increments here)
Do I contact either the referee or plaintiff's attorney to find out what this total will be in advance? Haven't found this specifically covered in the many, many foreclosure related posts (though I'm sure it exists!).
As to the rest, everything else falls into place after that, in anticipation of closing.
There is no "need" to know beforehand; but if you'd like to know, you'll need to contact the attorney. The referee acts only on behalf if the court, not in setting numbers.
Much success.
My question: Does any bid over the 2nd lien credit bid automatically apply/pay toward the 1st lien creditor?
Example: $50k 2nd lien auction; $200k 1st lien. Property sells at 2nd lien auction for $150k. Does the additional $100k pay straight to the 1st lien holder?
Thank you, Bob. I've noticed some investors showing up with just $1 more than the credit bid, but typically when I contact the bank's attorney they tell me they are not allowed to provide any info. Does this response vary from atty to atty?
The only thing that I know for certain is that many of the foreclosure departments in these firms are assembly lines. They will touch no file before it's time ... in other words, no need to do you an favor for a non-client.
Bob
#1 All Forums Contributor
- Investor
- Virginia
Quote from @Sean Stewart:
1 more related question regarding a 2nd lien auction. I am aware the 1st lien remains in affect and believe I have a handle on the challenges/steps for navigating that process.
My question: Does any bid over the 2nd lien credit bid automatically apply/pay toward the 1st lien creditor?
Example: $50k 2nd lien auction; $200k 1st lien. Property sells at 2nd lien auction for $150k. Does the additional $100k pay straight to the 1st lien holder?
Sean
As an investor who buys notes and has unfortunately had to FC on a property, I can tell you typically the attorney will not tell you what the bid is.
Regarding a 2nd lien, you are buying subject to the first and if it sells for additional, monies would go to any subordinate liens to you.
Appreciate your response, Chris.
To confirm I understand your meaning, I know when a a bid is greater than the 1st lien the funds flow to the 2nd, 3rd, etc. Are you saying the same in true in reverse? Technically, the 1st lien isn't subordinate to the 2nd. If I understand you, when the 2nd lien goes to auction and someone outbids the lender, additional funds go to the 1st lien, ever though they had not yet initiated a foreclosure proceeding?
Hope I'm making my question clear!
Quote from @Sean Stewart:No, when someone bids more than is owed on a 2nd, any surplus goes to the next lien in line. And if there are none, goes to the owner. The 1st does not have claim, as their lien remains and need to file their own FC.
Appreciate your response, Chris.
To confirm I understand your meaning, I know when a a bid is greater than the 1st lien the funds flow to the 2nd, 3rd, etc. Are you saying the same in true in reverse? Technically, the 1st lien isn't subordinate to the 2nd. If I understand you, when the 2nd lien goes to auction and someone outbids the lender, additional funds go to the 1st lien, ever though they had not yet initiated a foreclosure proceeding?
Hope I'm making my question clear!
Quote from @Sean Stewart:
Thank you, Bob. I've noticed some investors showing up with just $1 more than the credit bid, but typically when I contact the bank's attorney they tell me they are not allowed to provide any info. Does this response vary from atty to atty?
I purchased a FC in Alaska a year ago for $1 over the debt balance. It is not always an "attorney" here who handles the FC, we also have "Receivorship Services" in different areas of the state who have the following obligation: "...To act on behalf of the court as an officer of the court and a neutral third party, with a fiduciary duty to all persons or entities which are shown to have an interest in the receivership estate, or the proceeds of the receivership estate."
It was a 2nd and a 3rd that I paid off and now there is just the 1st TD and a very uncooperative loan holder. My current problem is not the fact that I paid off the 2nd and 3rd, but the 1st is at 3.75% and I don't want to give that up for current rates in a refi. The person who's name is on the 1st refuses to provide me with any information about the loan, balance, interest paid, etc. They are angry because a relative was "supposed to buy the property". It was public record and apparently the relative didn't move fast enough and I own it. I have a Trust Deed, Insurance and leases in my business name, but the loan holder still won't accept the fact that I own it and does everything possible to make things difficult for me.
Other than paying off the 1st which is about $190K (and I really don't want to do that with the interest rate so low) also, I sure don't want to do a refi now with rates so high. Do any of you out in BiggerPockets-land have a suggestion how I can manage this person and get the information I need? I'm sure I'm overpaying on some part of the loan and I imagine the surplus is being sent to her rather than credited back to the loan or sent to me, even though the payments are on my business checks.
The property cash-flows now but I have had to put a lot into it to get it out of the slum-lord class.