How to find what is owed on Mortgages and Leins on Foreclosure

8 Replies

Hi, trying to figure out how to find out what is owed on mortgage(s) for public foreclosure auction properties so I can determine what might be the opening bid at auction.  Looking in St Louis County and St. Charles County MO.    RealtyTrac seems to pull that info from somewhere and will list what is owed on the property for some properties but not all.  This will be helpful to weed out looking for properties may have a high opening bid.  Also, just wondering if the foreclosures ever auction for lower than the price owed on the mortgage?  I called the St. Louis County recorder of deeds but they say they only list the original mortgage and not what is owed on it.

In my experience, a foreclosure auction does not sell for less than what the mortgage balance is. I find the best deals by working with the banks directly vs the auction. The banks want a bad property off of their books and it is easiest to work with them directly.

Originally posted by @Spencer Hoyt :

In my experience, a foreclosure auction does not sell for less than what the mortgage balance is. I find the best deals by working with the banks directly vs the auction. The banks want a bad property off of their books and it is easiest to work with them directly.

@Spender Hoyt - You must be working with a single branch mom and pop bank because no reputable bank in the country would work directly with you. Until there is an auction (foreclosure sale), the bank doesn't own it so exactly how are you working with the banks directly? Maybe I'm misunderstanding what you wrote or, maybe you misstated but you did say "Off their books" which would imply they own it, which would imply they went through foreclosure sale and if that did happen, still, no reputable bank would work directly with a buyer. They have a duty to their shareholders/members to maximize recovery and minimize loss and not exposing the property (REO) to the open market would be negligent in my experience.

Maybe you mean working with the owners through their agent or, maybe you mean working with the bank through their agent after the foreclosure. In either case, if you are working with an agent, you are working with an MLS listed property. if you aren't I go back to my first sentence. No reputable bank would work directly through you.

To the original post....you don't find that out. Unless the current owner pulls out statements showing their balance to you and/or unless the trustee has published the bid amount (Which is usually the total debt owed or a formula of the total debt owed), you won't know what's owed. It's not public information. That said, a foreclosing entity will not foreclose for more than what is owed. THEY will only bid what is owed to them. If third party bidders (The public) drive up the bid price above total debt, overages go to other lienholders in line and if there are none, go back to the original owner. If there are no bidders after the trustee/auctioneer announces the opening bid, it goes back to the beneficiary (The lender) as an REO property.

Well, is there any way to know the amount of the loan the bank is foreclosing on to estimate what the opening bid might be.  For some reason, the law firms never put that out until right before auction.  If there is no equity then it is not worth the time to look at the property and run title searches etc...  So, the opening bid is always equal to what is owed on the loan that is foreclosing?

Ron,
Let me clarify without going into an essay. First I deal with small community banks whith whom I have formed a relationship with a local banker. Second, The bank will always bid up to the amount for the mortgage balance. Third, if the bank is having a difficult time selling the forclosed property they will work with an investor to get the asset off of their books.

Originally posted by @Ron S. :
Originally posted by @Spencer Hoyt:

In my experience, a foreclosure auction does not sell for less than what the mortgage balance is. I find the best deals by working with the banks directly vs the auction. The banks want a bad property off of their books and it is easiest to work with them directly.

@Spender Hoyt - You must be working with a single branch mom and pop bank because no reputable bank in the country would work directly with you. Until there is an auction (foreclosure sale), the bank doesn't own it so exactly how are you working with the banks directly? Maybe I'm misunderstanding what you wrote or, maybe you misstated but you did say "Off their books" which would imply they own it, which would imply they went through foreclosure sale and if that did happen, still, no reputable bank would work directly with a buyer. They have a duty to their shareholders/members to maximize recovery and minimize loss and not exposing the property (REO) to the open market would be negligent in my experience.

Maybe you mean working with the owners through their agent or, maybe you mean working with the bank through their agent after the foreclosure. In either case, if you are working with an agent, you are working with an MLS listed property. if you aren't I go back to my first sentence. No reputable bank would work directly through you.

To the original post....you don't find that out. Unless the current owner pulls out statements showing their balance to you and/or unless the trustee has published the bid amount (Which is usually the total debt owed or a formula of the total debt owed), you won't know what's owed. It's not public information. That said, a foreclosing entity will not foreclose for more than what is owed. THEY will only bid what is owed to them. If third party bidders (The public) drive up the bid price above total debt, overages go to other lienholders in line and if there are none, go back to the original owner. If there are no bidders after the trustee/auctioneer announces the opening bid, it goes back to the beneficiary (The lender) as an REO property.

Originally posted by @Spencer Hoyt :
Ron,
Let me clarify without going into an essay. First I deal with small community banks whith whom I have formed a relationship with a local banker. Second, The bank will always bid up to the amount for the mortgage balance. Third, if the bank is having a difficult time selling the forclosed property they will work with an investor to get the asset off of their books.

Originally posted by @Ron S.:
Originally posted by @Spencer Hoyt:

In my experience, a foreclosure auction does not sell for less than what the mortgage balance is. I find the best deals by working with the banks directly vs the auction. The banks want a bad property off of their books and it is easiest to work with them directly.

@Spender Hoyt - You must be working with a single branch mom and pop bank because no reputable bank in the country would work directly with you. Until there is an auction (foreclosure sale), the bank doesn't own it so exactly how are you working with the banks directly? Maybe I'm misunderstanding what you wrote or, maybe you misstated but you did say "Off their books" which would imply they own it, which would imply they went through foreclosure sale and if that did happen, still, no reputable bank would work directly with a buyer. They have a duty to their shareholders/members to maximize recovery and minimize loss and not exposing the property (REO) to the open market would be negligent in my experience.

Maybe you mean working with the owners through their agent or, maybe you mean working with the bank through their agent after the foreclosure. In either case, if you are working with an agent, you are working with an MLS listed property. if you aren't I go back to my first sentence. No reputable bank would work directly through you.

To the original post....you don't find that out. Unless the current owner pulls out statements showing their balance to you and/or unless the trustee has published the bid amount (Which is usually the total debt owed or a formula of the total debt owed), you won't know what's owed. It's not public information. That said, a foreclosing entity will not foreclose for more than what is owed. THEY will only bid what is owed to them. If third party bidders (The public) drive up the bid price above total debt, overages go to other lienholders in line and if there are none, go back to the original owner. If there are no bidders after the trustee/auctioneer announces the opening bid, it goes back to the beneficiary (The lender) as an REO property.

 Thanks for the clarification.

Originally posted by @Diane Brunkhorst :

Well, is there any way to know the amount of the loan the bank is foreclosing on to estimate what the opening bid might be.  For some reason, the law firms never put that out until right before auction.  If there is no equity then it is not worth the time to look at the property and run title searches etc...  So, the opening bid is always equal to what is owed on the loan that is foreclosing?

I've yet to force a foreclosure in either of those counties  so cannot comment specifically on what the protocol is. You can try to contact the attorney to see if they will divulge that info, but may or may not get a response.    Oftentimes in Sheriff's sales the final judgement amount is published whereby you can see how much the bank is owed, including outstanding balance, interest, late fees, legal costs, corporate advances for insurance, taxes, etc.  Some counties publish this list a few weeks ahead of time.  

Lenders do not always hold out for the entire amount owed, and sometimes will take less.  Particularly if the loan has changed hands several times and it's delinquent, they are traded at discounts so their cost base might be far less than total owing.  

Originally posted by @Diane Brunkhorst :

Well, is there any way to know the amount of the loan the bank is foreclosing on to estimate what the opening bid might be.  For some reason, the law firms never put that out until right before auction.  If there is no equity then it is not worth the time to look at the property and run title searches etc...  So, the opening bid is always equal to what is owed on the loan that is foreclosing?

The opening bid published on the notice of sale is the closest/quickest figure you are going to get, unless like I said before, you have a copy of the statement from the borrower and a copy of the legal fees from the trustee beforehand. The trustee isn't going to give you anything. The borrower might.

The opening bid is usually what is owed. Some states do one bid, total debt. Some states do tiered bidding as a "starting place" but most will open with what they are owed. Some lenders, (Like me) will open with total debt bid unless I'm under water and/or I don't want to take back the property for reasons I don't want bidders to know about (Like the foundation is falling into a crevice) so, i'll open at less than market value to entice someone else to bid.

@Diane Brunkhorst Misouri is a trustee state so the notice of default and notice of trustee sale ate all public record. Talk directly to the home owner,see what they are doing to remedy the situation and feel them out as far as being potwntial seller before the foreclosure takes place. If you are able to find a way to pick off properties before the auction the deals are much more profitable.