All Forum Posts by: Mary Chen

Hi Everyone,

My parents have a $200K junior lien on a house valued at about $1M.  My parents also have a $200K court judgment for a judicial sale on the property against this lien, but they have not exercised that judgment.  The bank has a $500K senior lien on the property through the mortgage.  The bank is moving to foreclose on the property in June.  My parents' attorney has indicated that if no one bids at the Trustee's Sale, the property automatically reverts to the Bank, and the junior liens are all wiped out. This is the same result as if someone bids with enough sum to cover the money due to the bank, but not enough to cover my parents' lien.   

My parents don't want their lien to be wiped out or underpaid.  Based on what we know (please check my understanding) it seems there are 2 ways to avoid this:

1.  If someone bids more than $700K for the house, enough to satisfy the bank's and my parents' liens.  This is the ideal situation.

2.  My parents can bid on the house themselves, but that requires coming up with $500K in cash, which (the attorney indicated), added to their court judgment for $200K, would give them the buying power to bid up to $700K.

Questions:

On #1: 

What do we go about researching the likelihood, based on historical trends, that the house would auction for less than 700K, or 70% of market value?  Are there sites or resources that we can use?  The house in question is in Rowland Heights, CA, built in the 80s, renovated 5 years ago, with a swimming pool, about a mile away from schools. 

Is there a way for my parents to advertise the bank's sale of the house to drum up interest and maximize chances of healthy bidding?  How do we go about doing that? 

On #2: 

Is it true that my parents can use the court judgment amount of $200K to bid on the house?  Logistically, how would this work, since they won't have a cashier's check for the $200K. If they won with a bid for $600K, for example, when it comes time to pay, do they just hand over the cashier's check for $400K and the court order/levy documents as payment?

Without borrowing, my parents don't have $500K in cash on hand.  Are there other ways for them to avoid getting their lien wiped out or underpaid?  

At auction end, do cashier's checks have to be delivered right away, or do you have some time after bidding completes to come up with the money?

How do we find out whether there are other liens against the house, like unpaid tax liens or other liens? 

Thanks!

Mary