Court Order Vacating Sheriff Sale

19 Replies

I am really upset. I bought a property from sherif sale. I was going to make a hefty profit from this sale. Today I received a notice from sheriffs office advising that “enclosed please find a courtesy copy of “plaintiffs motion to vacate sheriffs sale”. One of the chapters read as follows “prior to the sheriffs sale and without providing notice to plaintiff, the borrower filed a petition for reorganization under chapter 13 of the U.S. bankruptcy code. The sherif sale was conducted in violation of Automatic stay and is therefore void. So basically, it seems like the borrower filed bankruptcy after I won the bid at the auction. Sheriffs office said they will refund my down payment which is a relief but I’m wondering if I should fight this? I’ve never done this before and not sure how to go about disputing this?

You are "really  upset" because the plantif is trying to save his house??? What's wrong with you people? Find another opportunity and be happy the previous owner is trying to salvage the property.

This happens every day. But I’m guessing they filed BK before the auction, but the court wasn’t notified. There is nothing to fight, it is what it is. 

Originally posted by @Ricky Si :

I am really upset. I bought a property from sherif sale. I was going to make a hefty profit from this sale. Today I received a notice from sheriffs office advising that “enclosed please find a courtesy copy of “plaintiffs motion to vacate sheriffs sale”. One of the chapters read as follows “prior to the sheriffs sale and without providing notice to plaintiff, the borrower filed a petition for reorganization under chapter 13 of the U.S. bankruptcy code. The sherif sale was conducted in violation of Automatic stay and is therefore void. So basically, it seems like the borrower filed bankruptcy after I won the bid at the auction. Sheriffs office said they will refund my down payment which is a relief but I’m wondering if I should fight this? I’ve never done this before and not sure how to go about disputing this?

 Try being the lender who's held the note for over a year or more, spending thousands on legal to get to the foreclosure auction only for them to file BK. This prolongs it another 6 months or more.  Oh and the borrower hasn't paid a dime in 5+ years.....

Originally posted by @Wayne Brooks :

This happens every day. But I’m guessing they filed BK before the auction, but the court wasn’t notified. There is nothing to fight, it is what it is. 

Welcome to the wonderful world of Sherriff and trustee sales..  Keep in mind BK attornies are notorious for filing BK the day before or the morning of the sale.. its just part of the business.. you spend all this time get honed in on one property and boom its gone.

this is why to do this business you have to spread a wide net .. 

@Virs Esar

They are not going to save their house. They didn’t pay a darn penny in over a year. Lived rent free for over a year and had all year to file bk but no they waited day of sherif sale. I’m all for people trying to save their home but in this case they are just cheating the system. Know your facts buddy before bashing ...

@Jay Hinrichs

Yeah Jay that’s exactly what happened. Attorney literally waited last minute, few minutes before the auction started. It was a bummer because I had spent countless hours and resources on this property. But oh well, move on to the next. Appreciate your feed back. Thanks

Originally posted by @Account Closed :

Well that sucks. Happens all the time. But like @Jay Hinrichs said is true. Bigger net catches more fish.  

AS it relates to these sheriff  trustee sales if you just hone in on one property on the list its going to be very rare in most markets that that one specific property will end up going..  you can have a redemption last minute a foreclosure rescue a sale  lender modification.. lender postponement.. and then the BK although its important to follow the BK's many times those come back around 6 to 12 months later.. 

in my experience you have to track at least 50 to get  1..   some markets are different of course like OHIO most everything on the sale ends up going. but in other markets its as I described.

 

@Jay Hinrichs

If the house is occupied and has significant equity I would wager that 95% of the time it ends in BK. Why? What would you do if you couldn’t make your payments but your home had a ton of equity. They will have their attorney devise some BK plan and hope the court approves it. I have one where the borrower owes $90k in arrears which would of been $1500/month plus his payment of $1,000. He got the courts to approve a plan of $500/month for first 36 months and $3,000 month remaining 24 months. Borrower makes $20k a year. He is hoping daughter finishes college and can live at home and pay and increase his income. Courts are not supposed to allow someone to have “projected income” but they did. Is it fair, not to the lender but courts don’t want to throw someone out of there home and will delay the inevitable. I also do not blame someone for trying every way possible to save their home. Filing last day in my mind is not cheating the system they have a right to do that in order to try and restructure debt. Some will do it as a stall tactic and some truly want to pay and stay.

Originally posted by @Chris Seveney :

@Jay Hinrichs

If the house is occupied and has significant equity I would wager that 95% of the time it ends in BK. Why? What would you do if you couldn’t make your payments but your home had a ton of equity. They will have their attorney devise some BK plan and hope the court approves it. I have one where the borrower owes $90k in arrears which would of been $1500/month plus his payment of $1,000. He got the courts to approve a plan of $500/month for first 36 months and $3,000 month remaining 24 months. Borrower makes $20k a year. He is hoping daughter finishes college and can live at home and pay and increase his income. Courts are not supposed to allow someone to have “projected income” but they did. Is it fair, not to the lender but courts don’t want to throw someone out of there home and will delay the inevitable. I also do not blame someone for trying every way possible to save their home. Filing last day in my mind is not cheating the system they have a right to do that in order to try and restructure debt. Some will do it as a stall tactic and some truly want to pay and stay. 

Agreed..  and if your going to play the buy at court house steps game this is just one part of it..  no one is picking on you  the poor investor.

when I was hot and heavy into buying court house steps I had a good friend that was retired..  and he wanted some action .. he lives in Bend Or. I said well why don't you scout out some trustee sales for us and bid for us .. and we can do a profit share..  he went to one property ended up talking to the folks .. calls me back and says I cant do this.. I donate at church to help people stay in houses.. cant argue with that.

 

I’m headed to the county auction Tuesday. There are 3 good candidates (smaller county), and if I win one, it will be the first. About the only thing I’ve accomplished so far is notifying people they had taxes haven’t paid, or their elderly parent has taxes they haven’t paid, or the property owner by uncle Joe that was split to 5 heirs had taxes that weren’t paid. I have spent time, effort, and a few bucks in gas and McDonalds and gotten nothing out of it. But honestly I don’t feel bad either having walked a few people through how to pay taxes online they weren’t aware was about to cost them or a family member a house. 

If I do get one of these I’m just going to sit on it 6 months. @Ricky Si it sucks you lost your time, but at least you got your money back. If you’re not already, be aware you shouldn’t spend a penny on the property beyond what is necessary to keep it safe. Previous owner can get it back for 6 months non homestead where I’m at, 2 years of homestead. 

@Ricky Si Sorry, man. It sucks to lose a deal like that. No, it's not worth fighting the outcome. You're better off looking for other deals. Monitor what happens with this one, though. If the borrower fails their plan and the case gets dismissed, this might go back to the sheriff's sale. It might take 6 months or two years but maybe, just maybe, you'll get another crack at it!

@Ricky Si ,

You say they are "gaming the system".  No, they are USING the system to their advantage.  Get over it.  If you can't see past this for what it is--playing hardball in real estate--then best get out of the game.  You'll just tear yourself up and be miserable.

Good luck

Originally posted by @Ricky Si :

@David Abbate

Are you entitled to your money back plus interest, or are they just simply returning your money?

Yeah David, they returned my deposit in full but they didn’t pay any interest...

they are not obligated to pay you interest the only ones that are .. are the IRS if they redeem which is rare as hens teeth.

 

Originally posted by @Marc Winter :

@Ricky Si ,

You say they are "gaming the system".  No, they are USING the system to their advantage.  Get over it.  If you can't see past this for what it is--playing hardball in real estate--then best get out of the game.  You'll just tear yourself up and be miserable.

Good luck

To me, "gaming the system" means taking unfair advantage at the expense of others and morally it's wrong. It may be legal but it's not playing "hardball," it's playing dirty. The bankruptcy system was set up to help people that get overwhelmed with their debts and are legitimately trying to re-organize their financial lives. I have no problem with people who are trying to do the right thing. However, for the 8 out of 10 borrowers that manipulate the bankruptcy system just to stall the foreclosure, it pisses me off. Liquidating distressed notes is how I put food on the table for my family and they've taken unfair advantage of a system that's meant to help people. I don't dwell on it because that's not productive and won't get me anywhere. The trick for the investor (and the OP) is to have a big enough pipeline of deals to account for the ones like this that get away or, in my case, the borrowers that extend my timeline to liquidation.

 

As a lender/note investor for past 10 years we have seen this a ton of times.  We have had a few where borrower filed bk, never filed a plan, we restart fc to only have bk restarted.  Or a plan developed and borrower never continues it to only file it again.  This drags outs months to years for us to sell.