Bidding as lender at sheriff sale - how does this actually work?

6 Replies

Scenario:

- You are the lender (purchased the note while in foreclosure)

- Lender has been awarded default judgement

- Sheriff sale scheduled 6/15/18

How does it actually work when you show up for the sale? Do you just show up, say you are the lender, credit bid, and they do not make you pay? Or do you need specific documentation proving this? 

Thank you,

Thank you for the info.

Any idea how it works if the foreclosing lender is still the original lender (i.e. there was never a substitution of plaintiff)? I assume the same answer applies (attorney will handle).

True, but if you purchased the note, there should have been an Assignment recorded to show your ownership of the note. If you are at the foreclosure stage, either this did occur or the AOM was not recorded. You should have that recorded and make contact with the foreclosing attorney.

@Daniel E.

Few other comments/questions:
1. Is there equity in the property
2. What is your strategy - do you want the house ?

As @Cody Cox mentioned make sure the assignment is in your entities name. Your attorney a week before will ask you the opening bid. You can bid payoff or a lesser value. Completely up to you. In my instances if I want the property (almost never) I bid full payoff. If I want to sell it I have the opening bid lower and less than market value to get bids with the potential it gets bid up.

I just had that happen where my opening bid was around $35k with a value a little over $40k. Property sold at auction for $45k. I was very happy.

Originally posted by @Daniel E. :

Scenario:

- You are the lender (purchased the note while in foreclosure)

- Lender has been awarded default judgement

- Sheriff sale scheduled 6/15/18

How does it actually work when you show up for the sale? Do you just show up, say you are the lender, credit bid, and they do not make you pay? Or do you need specific documentation proving this? 

Thank you,

You'll want to get the AOM recorded ASAP, as there is generally a cutoff period before any changes can be made prior to the sale, and depending on the state/county they give the borrower time to respond or refute the changes.  At worst, you get the Seller of the note to issue you a QCD after the sale if you don't get a substitution of plaintiff.  You could also try to get the attorney to issue an assignment of judgement.  

Thank you all for the replies. In summary:

1) I am fine owning the property, but can let it go for below market value and still make a good profit. Will be setting the starting bid at 80% of market.

2) The note is being purchased after judgment but before the sheriff sale. AOM has not yet been recorded, as it has only been in existence since the purchase (~5 days).

3) Sounds like we will do an 'assignment of the bid' in the end to get this done.