All Forum Posts by: Ron S.

@Winkler - You just regurgitated the same crap from your first post, only you added a whole bunch more words to make your case in the second post. Ok...you win! Your right!! I guess i've been doing foreclosures in the state of Michigan for the last 20 years incorrectly, and so have all of the lenders, title companies, trustee, auctioneers and attorneys I work with! Thank you for setting me on the correct path.

First...Are you talking about columbus Michigan? Or Columbus Ohio? I'll assume Ohio for now. If a valid assumption, this is Michigan. Judicial versus non judicial and comletely different rules and procedures.

Second...shouldn't be a correction...the original post related to bidding at foreclosure. IF there is a foreclosure sale, they will always bid. Why go to sale if there is no bid? You can't go to sale without a bid so, yes, they always bid on their debt if they go to sale. In your scenario, they didn't go to sale so, it makes sense there was no bid but if they did go to sale, there would be a bid. So, since they didn't go to sale, they sold you the note. How is that any different than what I said earlier?

Note sales and foreclosure sales are apples and oranges here and appear to be incorrectly comingled together as one in the same.

It will always be an REO if it doesn't sell 3rd party at the foreclosure sale. Yes, they do take title. A Trustee's Deed upon Sale is issued to the bank if there are no successful 3rd party bidders. The bank might have to wait for up to 12 months to get it but, they will get title after the redemption period. Will they and can they do something with the note after the sale where they won't take title? Sure! That's a different issue though and not related to a foreclosure sale that reverts back to the benificiary.

I have no argument with you about setting a minimum bid to start but remember, if you are talking Ohio and we are talking Michigan, it's different. There is no 2/3's of appraised value requirement in Michigan. Sure, that happens all the time, all over the place. The bank determines what bid they will allow before they counter back with a competing credit bid though, if that's in question regardless of what the starting bid may (or may not) be required to be.

* Banks ALWAYS bid on their own debt at sale. It's called a "Credit Bid". They don't actually write a check. As the foreclosing entity, their openning bid is their credit bid and they can bid up to total debt. Buyers can bid beyond total debt if they think there is a deal there. (See what happens if that is the case below).

* You can "Buy the deed" for a few thousand from the homeowner then have the bank laugh at you when you request a discounted payoff from them. There is no "Discounted amount". The redemption rights that belong to the HOMEOWNER require the total debt plus fees and costs to be paid to redeem the home.

* Banks don't buy their non performing loans. They already own them. They sell them (The loan/note)! Or they foreclose on the property securing the non performing loan.

* Foreclosure attorneys have nothing to do with setting the bid or value amount. The bank does. The foreclosure attorney simply processess the lender's instructions.

* Banks don't "Set the value of the judgment". Banks are required to publish the factual judgment amount (= How much the borrower owes including fees/costs). It is what it is. It's not a "Value", it's the actual default amount they owe. Now, what they open the bid at, may have nothing to do with the judgment amount. It's usually a factor of value (Usually, but its investor specific). (Bid instructions to attorney might look like, "you are instructed to open the bid at 95% of Fair Market Value).

*Banks don't go to Sheriff sale auction hoping for a specific amount, then go to sale again if they don't get that amount or change the amount. The bank (The attorney for the bank, or the vendor for the attorney, for the bank) sets the amount, it gets published with a sale date. That sale date happens and it's done, once. not repeatedly until some magic number or outcome happens. If a 3rd party (Not the bank) doesn't buy it, it goes back to the bank as REO. The redemption period starts after the Sheriff sale. If the borrower abandons the home, vacates the home, does not allow the bank (Or 3rd party purchase) the right to inspections, the Sheriff can evict and eliminate the redemption period (Which can be up to 12 months depending on principle paydown and/or other factors) or, reduce the redemption to 30 days from Sheriff sale. Don't mistake a postponment for your scenario. Just because the bank postpones a sale doesn't mean they are doing anything other than a postponment (Like trying to entice different bids, interest in it, etc..). It costs the bank to postpone, each time.

* Somehow recaptured through Fannie/Freddie Mortgage Insurance? You were told wrong. There is no such thing. You are mixing little bits and pieces of a very big puzzle together that do not go together. ..

* Banks already wrote down their losses prior to sale. Probably a couple of times. They may take a subsequent writedown after sale depending in the net deficiency and, might even take another one after they sell it on the open market, depending on the net deficiency (If there is one).

* To the one thing you heard right, correct, if there is a 3rd party bid above and beyond total debt owed, any overage after the debt owed, fees and costs and any other liens behind the foreclosing entity is paid, it goes back to the original homeowner/borrower.

* No one bought the note at the foreclosure sale. The sale is for the home, not the note.

If it's one of the "Too Big to Fail" banks, try to get to their asset management department. You'll have to start dialing for god only knows how long but persistence usually pays off to get to someone that takes care of properties owned by the bank. Send a letter themed from a neighboor upset about the blight and health and safety elements of the neglected and blighted home. I'd use dollar figures and big words that sound like pending lawsuits. That usually gets someone to call a local vendor to at least clean it up a bit and secure it. As others have posted, if its a local or regional bank, walk into a branch and demand (respectfully) to be put in contact with someone in REO or Asset Management. Then articulate your concerns.

This isn't for buying the property, but for ensuring that its secured and not impacting the quality of life of your home negatively by its proximity to your home.

If your objective is to buy it, yeah, wait till its on the market.

@Paul - I never said a word about BK removing liens in my post but while on the subject when they do, it's only upon completion of a 13 where the debtor filed and was granted a lien strip. You said short sales aren't popular post BK because of increased legal issues. I said your wrong because there aren't any increased legal issues.

To your second point: When the debt is dicharged in Bankruptcy, and the lender codes the account in Metro II format to the bureaus, as debt included in Bankruptcy, THAT trade line will not show as a foreclosure. It will show a zero balance, with a BK designation. Whether there is a foreclosure in the public records section of a credit report or not, is another story. Re read my original post...I said ON THAT TRADELINE, not that it would not appear on the public records section.

We may be splitting hairs here but, i felt a further comment was warranted.

@ Allen - No worries! Sometimes I have to seperate the "Consumer" from the "Industry Colleague". Consumers have all of these conspiracy theories that things just sit for the purpose of things sitting.

@Allen - There is no redemption period in a non judicial foreclosure. None at all. There is also no deficiency after foreclosure (In California), none at all (And no need for deficiency judgment waiver). There are very very few exceptions to that but for most of us civillians, California's, "Single Action" applies.

And to clarify a common misconception, Banks don't "Pay" full price at foreclosure sale. They don't pay a dime at sale. The foreclosing entities does what is called a credit bid. It's simply an accounting methodology and there are actually no funds transferred between any parties. The only bank that would EVER actually go to sale with money would be a junior lien holder trying to bid to protect their lien position and keep from being wiped out (I do it daily when I'm the junior lien holder).

And while I agree that it can take months to get the foreclosed property on the open market, it's not because they are just sitting there. We have to make sure there are no tenants, if there are, we are screwed for the term of the lease. We have to make sure we get an inspection, find out what's wrong with the property, see if it's economically feasible to rehab the property, ensure we are compliant with all local/state rules regarding REO property, register the property if applicable, ensure health and safety issues are addresssed (Toxic DDT Landfill?), arrange for someone to clean it out if its a dump (It usually is), get bids for repairs, approve bids for repairs, get repairs, re appraise the property, then list it with a local agent.

That doesn't happen in two weeks.

You compete with money. Doesn't matter how "big" the player is, if you have the money to buy it, you are on a level playing field. Is some yahoo going to buy it knowing they will make nothing on it just to discourage you from bidding? Maybe. Let them do that a few times and have fun with it and see how big of a player they remain after a while.

Bigger players work on scale of economy. As others point out, they may have more money, cheaper money, better vendors/contractors to do better, faster work cheaper but, if you are a mom and pop player with the intent of buying at the courthouse steps and you have the money to do it, go for it. They have no more say so or leverage than you, if you can match them dollar for dollar and leave your emotions in the car. Use your head and buy on logic.

There are a group of "angels" (I'm being sarcastic here and in no way inferring the OTHER angels you refer to are in any way similar) up in Northern California that typically used to bid on foreclosure sales. They all got together one day and said, "hey, you keep bidding me up, how about I agree not to bid you up on this sale, if on a future sale, you agree not to bid me up". They thought it was a great idea and got together to see who would get to bid on a particular property at a particular auction, on a particular day. The only problem was, it was ilegal.

Again, i'm not saying a group of people can't buy foreclosures by bidding at auction and, i'm not saying that they can't turn around and sell it right after, I'm saying that one needs to be careful as it relates to bidding at public auction. Anything done to discourage someone from bidding on a sale can be viewed as improper.

Here is the link.

http://www.justice.gov/opa/pr/northern-california-real-estate-investor-indicted-bid-rigging-and-fraud-conspiracies-public

@ Paul, with all due respect, I disagree with you on a couple of issues. There is no increased liability for a lender to do a short sale post BK. There is no potential increase in a possible title issue either. Just like a normal open market sale, there is a seller and a buyer and both open title and escrow and both pay for policies to ensure clear and marketable title. It doesn't matter if it's a short sale or an open market sale. It still processess the exact same way, closes the exact same way and funds the exact same way. The ONLY difference is the funds disbursements to lien holder(s) may be short of full pay off.

Also, there is no foreclosure on a credit report post BK, if the lender forecloses. As a BK attorney, you must be well aware that once there is a discharge, there is no subsequent derogatory reporting on the borrower's tradeline (Assuming the foreclosure happens AFTER the BK discharge).

@William - There is no deficiency judgment possible post BK, unless they reaffirmed the debt. In some states (Like California), it wouldn't matter if they reaffirmed or not, deficiencies are not allowed by statute.

It's Ocwen! That's to be expected. No one cares what your complaint is. Sorry, it's just a fact when dealing with Ocwen.

You can file a complaint with the CFPB. That's about it. You'll feel really good when they respond that they've received your complaint. You'll feel even better that they will update you and tell you, "We've given the lender your complaint and they are researching it and will respond within 30 days". And you'll really feel good when they tell you, "Hey, check your inbox, the lender responded to your complaint". Then you'll feel deflated when their complaint response closes your case and you get an email from CFPB, "We would like you to take a brief survey to let us know how we are doing". That will be the end of it. You won't accomplish your objective and you won't get your way, and Ocwen will go on with their business and the CFPB will take your complaint and label it as another success story of the government helping you.

The moral of the story is that you are dealing with Ocwen. You have to just deal with it. "Get along, go along". Fighting the system will get you nowhere. You have a motive. You want to execute a short sale. Your motive may not be the same as theirs and your concerns and your timelines and views of efficiency and good service don't mean anything.

Hell, you may even be wrong! It wouldn't be the first time a short sale participant had a flawed view of what they think should happen in a short sale transaction.

just my two cents...