HOA forclosure in NC
I witnessed an HOA forclosure auction recently that went as follows: HOA was foreclosing for $10,000. To my shock the auction bidding between two companies there went to $160,000. Then in an outbid period someone else has pushed the price to $170,000. I personally checked this property out and they have had a substitute trustee assigned for the first mortgage...whose demand letter in the file makes the total due about $150,000. Now.... I am 100% confident that this is a $235,000 house....did the comps..... thats it maybe 5grand more butthat is.
Am I missing something or have 3 people made the error of thinking they are actually buying this house for the bid amount?
I would have been happy to buy the HOA forclosure for $10,000 and then pay off the $150K.... leaving me enough room for a quick flip on a relatively new home.......
Question..... have these three people bidding made a grave mistake or have I missed something?
We have bought a few forclosures and flipped them over the past couple of years. We are not neophytes but not experts either.
The other question is...... what happens to all that overpayment.... (like $150K)....does it go to the 1st mortgage holder?? I've been told that is will go back to the original home owner that was foreclosed on if they petition for it and that the 1st mortgage holder has no legal claim on this excess?