All Forum Posts by: John C

Joel thanks for your quick response. And yes it's here in the US.

Well, in regards to the attorney, we have an appt. set up next week where i'm sure he'll explain it in more detail. I just wanted to get an idea of whats going on and what I'll need to ask him before hand.

The auction itself is going to be held in april. They have a starting bid, but there's no max bid according to the sheriff''s office.

my main concern is what happens to the title if it doesn't go to auction. I realize the junior liens get wipped out at auction. But i'm not sure what the process is without the auction. Would the bank be responsible for cleaning up the title?

The bank I believe has foreclosed on the property. I agree its a special situation. The owner had signed a ucc form basically giving the bank the rights to the property if defaulted on. So, I'm assuming this makes a difference.

Don't get me wrong, I realize it sounds fishy, thats why i ask! I do want the deal to go through but I'd like everthing to be legal. thanks again.

We have done our due diligence (i.e. visit to the site, title search, hiring an attorney etc). on a property going to auction in a couple of months.

However, out the blue, we recently received a call from our attorney basically stating he can work out a deal with the bank before the auction. Is this typical? Would this be considered a short sale or a reo? Our attorney was firm in stating that the previus owner is not involed and the bank is the prime negotiator.

Also, because it won't go to auction, what happens to the junior liens and taxes? Is the bank responsible for clearing up the title and paying the back taxes? does anyone have any experience with this type of transaction or any opinions. Thank you for your responses.

Why do banks bid at auction and sell properties as REOs. My understanding is that the bank receives 85% to 90% of the deficiency from the fdic regardless of wether it was sold at auction or as an REO. So it wouldn't make a difference if the property was sold at auction. The banks would still be compensated for their losses from the fdic. So why the mad rush to buy them at auction. Am I missing something?

Let's just say there was a subordination agreement, hypothetically speaking, and the 2nd assumed the first position. How would the bidding take place at the auction if the judgment amount was 540K and the property was valued at 150K? Would the lender base his bid on the judgment value or on the market value of the property? How advantageous would it be for the lender if the bidding went up to judgment value when the property is only worth one third this amount?

A property with two mortgages is coming up for sheriff sale. The second mortgage, which is a construction loan (and twice the amount of the first) is foreclosing on the property. I was under the assumption that the first usually forecloses. However, this is the second.

I’ve read many of the previous posts and they all seem to arrive at the same conclusion that the first in time is the first in line. Which makes perfect sense, however there a number of things that contradict this idea. Two of the biggest are the listing of the property in the daily paper and the information provided to me by my RE attorney.

while looking through the paper I noticed the property was NOT "subject to mortgage". Legal definition for "subject to mortgage" as the Philadelphia sheriff's office has it is:

The property is NOT being sold as a result of the first mortgage, but as a result of delinquency on a subsequent mortgage. Successful bidders will not only be responsible for their bid price, but for all mortgages preceding the mortgage of the lender who foreclosed on the property.

Also, the conversation I had with my RE attorney basically suggested that I wouldn’t be subject to mortgage either. His point was that even though the 2nd is foreclosing, it would not receive any funds until the 1st was paid off.

Not sure which information I should rely on. My gut tells me to follow the official paper and the RE attorney. But then I wonder why some many have contradictory statements on this site. Please help me to make sense of this situation as I don’t have much time left.

Lastly, the 2nd bank filed a UCC (uniform commercial code) financial statement obtaining rights to the property. I’m not sure if this changes the superiority of the liens, sort of like a subordinate agreement, making the 2nd first in line. Or perhaps the first was satisfied but never recorded.

I thank you in advance for your help.