I was confused when I learned that the lender can also bid at a foreclosure auction. I thought the lender owned the property when the borrower defaulted. Who is the seller?
I was confused when I learned that the lender can also bid at a
foreclosure auction. I thought the lender owned the property when the
borrower defaulted. Who is the seller? (The county?)
Also, if I buy a pre-foreclosure, can I try to offer the lender less
than what is owed? Do they make these types of deals? Any
recommendations on what is an offer they would consider (e,g, 80%)?.
If I do make this offer, who do I make it to - the lender or the law
firm representing them?
the seller is the bank that holds the mortgage. But, they can bid on it too.
They own a lien. they are foreclosing to own a deed. If someone owes them
$87,032 on a house 9after late fes and atty charges) they will bid that amount
as the opening at the auction. Basically, that is the ct of foreclosing. they
are saying "This person has defaulted and owes us $87,032. We are taking the
house back, for that price of $87,032. Does ayone else want to own this house
INSTEAD of us, and are willing to pay $87,033?" If someone bids that, then the
deed is given to the bidder, the money is given to the bank, and the lien is
paid off. The person paying it off (the bidder) owns the house, since they
bought the foreclosed bid for $87,033. They HAVE to bid on the sale though, in
order to establish a price. Otherwise, they could get one guy show up and
offer $100, and they would give him the title and he would own the house.
Shoot, we ALL woudl go into foreclosure, and bid on each other's houses to get
them at great prices. SO, the bank bids the amount due. At ALL auctions.
Now, they ALSO can bid HIGHER if they WANT. Many banks do NOT, even if the
house is worth $130,000 and the amount due is still $87,034. SOme DO, because
if they can buy it for $90,000 they can make a profit by selling it for
$130,000. Mopst of the time, they just want to get their loan paid off, and
allow someone else to buy it if they bid $1 over (or more) than the amount due.
that is how an investor can buy a $130,000 house for $87,033 and make money.
I just closed on one this week to sell that I bought at $24,012 and sold for
$42,500 after putting about $1,500 in repairs into it. A nice little profit.
NOthing big, but a decent return.
Yes. They at times do that. Not always, but at times. I woudl work it out
with them BEFORE you actually "buy" it. Get it locked up fromteh seller, under
contract, adn then work with the bank to see what you can do.