Real Estate Investor · La Fayette, NY · Member since 2017 · 110 posts · 27 votes
There is this house in my friends neighborhood, nice colonial nice neighborhood and typical nice people. Husband went/going through Bankruptcy and house in wifes name is being foreclosed on. Bank got the judgement and now own? the house. (according to property tax record) Going up for courthouse steps auction and Hudson Marshall is the marketer. (I bought an auction house through them last year).
House in good condition/movein would sell for $265K or so. They had a mortgage from 2010 for $250, their judgment was $465K
Wondering what the "upset" price may be on auction day? Next week.
Also. So bank gets a judgement, they get the property back then put it on the courthouse steps.. Usually doesn't the bank just bid on it that day and take it back to unload later? How does that work?
I guess it got to be cash on day of auction as well. I can likely do that, but man $175 is my tops. House doesn't appear to need much and highly unlikely this family did anything bad to it.
So I'm trying to wrap my head around it; (I'm sure I won't be getting this house but just understanding the process). In a sale like this, the bank sets the price it wants, the " upset price" which is what usually? Market value, what the mortgage originally was for (which was $254K I think)
So if nobody is willing to bid that amount they take it back and try REO because of more potential clients, right?
I'd love to take it for 175-185, it would be a steal. It is a tight market in this school district and it's a desirable neighborhood. The 100 homes in there typically sell between $240-$280K and they are all similar style.
Funny thing with this house, the owner is an attorney (albeit not good at finances) But everyone has their issues.
The bank does Nit own the property now....the owner/borrower does. At the foreclosure unction, the bank has right to bid up to their judgment amount, or a lower price if they choose. If no bidder bids up to this amount, Then the bank takes it, and owns it.
Call the bank's lawyer and ask what the upset price is. Sometimes they will tell you. I also understand that banks might be more willing to deal at the end of the quarter or year - the fewer properties on their books, the better for their balance sheet.
I did call the lawyers handling it and they couldn't revela anything about the property BUT yes they did indicate I could cal the office and an automated recording option would state upset price the night before. Hudson Marshall told I could call them too the day before or day of
Call the bank's lawyer and ask what the upset price is. Sometimes they will tell you. I also understand that banks might be more willing to deal at the end of the quarter or year - the fewer properties on their books, the better for their balance sheet.
end of quarter is a real thing I bought a big mansion that a NBA player had gotten 3.4 done on a disposition from wells fargo .
but it had to be off the books by a date certain so we had about 6 business days to close it.. we paid 1.7 million in cash for it.
then refinanced it after we owned it and pulled out another million to finish it.. turned out to be my best rehab ever sold it first day on the market for 5 million :) I had 2 other partners.. so its was a nice pay day.. but that all happened because wells wanted it off their balance sheet or default list by end of a certain quarter..
Almost like the old saying of how Car salesman want to meet their month end quota so willing to make a deal. Agree though, compnaies getting things off their books is more concerning than price (in a way) nice deal and like you said, it was because of your ability to act quickly.
This house has been through a foreclosure process for over almost 4 years. Owners tried to rework things early on but just never could get ahead. If I were the bank, I'm sure they are happy to move on from the place. Seems like a long time. It may be even 5 years since it started.
plus our $12K/year property taxes don't make it cheap (thats on a assessed $280K home) I look at other homes in various parts of the country, astounded at how chep taxes are, because that would take the anxiety out of unloaded a property when flipping. I see places at 300K value taxed at $3,000 or less a year.
Brian Garrett I’m not sure the banks care about getting market value per se, as they can’t keep the overage. Usually the bank ends up buying them back because the amount owed is at or over ARV. The deals are for the exceptions in which this isn’t the case
Call the bank's lawyer and ask what the upset price is. Sometimes they will tell you. I also understand that banks might be more willing to deal at the end of the quarter or year - the fewer properties on their books, the better for their balance sheet.
I don't see the lawyer saying anything to anyone. In the case of bank owned, I don't see banks discounting properties to get them off their books in this market, in today's economy. They have a duty to investors to maximize recovery and minimize loss. If the book value of an asset is X and they sell it for Y, not only would they have to answer to their investors, they might have to answer to their regulators if they are disposing of assets at a discount just to clear their books, without a documented reason why (Like...Value may be "X" but, deferred maintenance equals "Z" so, discounting and selling for "Y").
We aren't in the market we were from 08'-14' where this "strategy" may have been more acceptable. Back then, values were declining. Today, they are not.
I called the Attorney office and the upset price was $193K . So I'm going to the auction tomorrow and we'll see what happens. If this sells for less than 200K that'l be a steal for this house and neighborhood.
If I read correctly the seller will clear all the liens. It can be handled on line you need to claim you pay in cash etc. I was the listing agent home was sold through Hudson Marshall. That house in CA was red tagged for several violations. I went to Compliance and told the auction house what was wrong with it. It was determined to be a cash only deal. I was the listing agent and received 50+ calls. The home was abandoned and they tried to short sale several times before. The bidder had to pay 1% fee(hammer fee). Hudson Marshall warned me not too many homes get sold at auction or through them. The lender hired me to get it sold if auction did not get the price lender was looking for. In this case, 50 inquires through me, 20 bidders and last 15 sec offering shot through the roof it was sold at ~ 85% Zestimates. The buyer pulled a fast one at closing ended up getting a mortgage from a private party. In your case 66% is your max. You need to determine their acceptance value. Good luck
well i went to it and just as i thought, simple and short. No bidders andsold for the upset price back to thebank. Lawyer said $1 more and its mine. No cashiers check and the terms were 10% down rest in 30 days. Hudson marshal wrongly told me on the phone 100% cashiers check,
Its s steal at that price. So bummed not prepared. Could easily sell for $265k
Hi, back again. Tis house I mentioned is now listed on Auction.com for a 3 day sale. They are starting the bid at $73K. based on other auctions, I'm going to assume it'll be $10K increments. curious how it will go. I'm no longer interested in it as we are looking at another property and putting our efforts onto attaining that one, but as always, we still keep an eye out for others.
DIFFERENT PROPERTY:
QUESTION: does state and fed tax arrears follow the house or owner in a foreclosure, courthouse auction? this house I'm looking at has been going through chapter 13 procedures for the last 5 years (yeah these people dragging out the inevitable). Looking through records of the BK court they have listed on the trustee's report State tax commission claim allowed $30K and a /IRS claim allowed $50K but I don't see any liens on the property in the county court clerk records.
obviously I'll meet with an attorney (because this bankruptcy is so drawn out) before I bid on the property (courthouse steps) but looking for thoughts/opinions. It's slated to go up for courthouse auction in 4 weeks. The chapter 13 was dismissed due to failure to pay agreed upon terms.
Edward R. , it sounds like you’ve done most of the research on your neighbors property and it’s still a good buy at the right price.
Perhaps someone new to the game would like to get in on that one, since you know it’s not trashed or in a bad area.
Would be nice if your share the info (address, auction site, etc) with the new guys and maybe throw them a bone. (Hint Hint all you new guys looking for your first deal)
As to your other question: can’t help ya there. Outside my area of expertise. Best of luck!
Call the bank's lawyer and ask what the upset price is. Sometimes they will tell you. I also understand that banks might be more willing to deal at the end of the quarter or year - the fewer properties on their books, the better for their balance sheet.
I don't see the lawyer saying anything to anyone. In the case of bank owned, I don't see banks discounting properties to get them off their books in this market, in today's economy. They have a duty to investors to maximize recovery and minimize loss. If the book value of an asset is X and they sell it for Y, not only would they have to answer to their investors, they might have to answer to their regulators if they are disposing of assets at a discount just to clear their books, without a documented reason why (Like...Value may be "X" but, deferred maintenance equals "Z" so, discounting and selling for "Y").
We aren't in the market we were from 08'-14' where this "strategy" may have been more acceptable. Back then, values were declining. Today, they are not.
plus you never know if the bank is going after their PMI insurance ??? so they don't care if they take it back they are going to AIG to get paid.
PMI and going after AIG. The intricacies of the banking/mortgage. They always have a way out. I was telling my wife the other day how there is always a large writeoff for banks. Syre a homeowner may take out a 200k mortgage, pay the bank for 5 years then default and in the end the bank writes off $450k plus all the legal expenses. Such a racket.
Thanks for the enlightenment. Looks like my house #2 has the IRS lien attached to it. Those people have been in limbo for a long time with mortgage modification. I’m going to consult with our RE attorney and see what he thinks. Surely his first response is don’t do it but it’s all about the numbers and risk (and thus 2nd house) May be to risky with unknowns on lien and eviction.
Its amazing the complications I come across on how the industry is handled. LIke seeing a title report and how XYZ need to be done first before they will consider title insurance. Like a report from Chicago title and how the IRS liens need to be clear.
So it is my understanding that IRS leins could expire on a property once its sold and after 120 days. I'm assuming the IRS doesn't see the benefit of reattaching a lien to a property that sold for $225 and worth $300K (lien is 30K)
The original property I first went after on this thread apparently does have a few lien/judgments against the female owner. one is a IRS lien for $50K WOW!
