Foreclosure in Arlington>Question Details

Sagula, Other/Just Looking in Arlington, TX

Hello, my house in TX was foreclosed on June 1st by my 1st lien mortgage. Nobody seems to give me the total figures to find out if the sold price of

Asked by Sagula, Arlington, TX Mon Jun 7, 2010

the property was a short sale or if it was high enough to cover some of the second lien mortgage. I know that the current market value of the property is about 35k higher than what it was owed to the 1st lien but I don't seem to get any answers. Any idea who I need to go to?

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0 votes Thank Flag Link Sat Jun 26, 2010
Thank you very much to all for your time and advise. It has been really helpful since I was running around without answers. I appreicate the help!
0 votes Thank Flag Link Sun Jun 13, 2010
The only way any other lein holder gets paid when a property goes to foreclosure sale is if they bid or if there is a third party bidder. If either of these things happens the first gets all their money and then each other lien holder would get paid up to the total bid at foreclosure sale. By letting a property go to foreclosure, you are at the mercy of the bank foreclosing. If the other lien holders do not bid or a third party does not bid on the property then the other lien holders have the right to go after you for the deficeincy in most states. To find the winning bid you should be able to get to the attorney or call the bank and find out how they are going to complete the 1099 A or C and you will understand what they considered the fair market value and or bid at foreclosure.

Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee
0 votes Thank Flag Link Fri Jun 11, 2010
In Texas there is no redemption for a foreclosed house. The foreclosure notice period before auction is 21 days, and auctions are held once a month, always the 1st Tuesday in the month in every country at the same time. The foreclosure can be stopped at any m oment UP TO THE AUCTION, if the owner can come up with back payments and ge tthe loan reinstated with the bank before the house is auctioned.

If the house is foreclosed due to taxes, there is a redemption period. A tax deed sale does indeed transfer a clear title to the auction buyer, but there is a 6-month redemption period. If this is your homestead, the redemptioin period is 24 months. But there is a statutory 25% premium required for the redemption, that is, the redeemer must pay back the costs to the tax lien purchaser plus 25% interest. Base costs include any fix-up done in the interim. After 12 months the interest rises to 50%.

If your house did not sell at the June 1 auction, it is retained by the first lien holder, and could go to public sale, listed with an agent (as Real Estate Owned, or REO). You as the previous owner would have a chance to buy the house, but this would be a new purchase, and other funding or cash would be required. In an REO, technically a short sale might be involved, in that the purchase price could be lower than the remaining mortgage. But I would not expect the bank, at any rate, to sell an REO to the previous owner for less than that previous borrower had in the original mortgage.

It is possible that in the case of upside-down mortgages, where the market value has fallen below the amount of the original loan, that the asking price could be below the mortgage amount. In Texas, the term "short sale" is not used commnly for the negotiation of REOs, but I have found it is in some other states. But the same principle is involved if the negotiatted price is less thatn the mortgage held by the bank.
0 votes Thank Flag Link Fri Jun 11, 2010

The second gets nothing. The first gets it back for what is owed on the property they do not overbid themselves. If there is no bidder it reverts back to them.
0 votes Thank Flag Link Thu Jun 10, 2010
Sorry for the confusion and thanks for taking the time to answer.
Let's try again.
We had two liens on the property, we owed 115k on the fist one and 25k on the second one. The approx market value of the property is about 165k.
It was my understanding that the foreclosure process consisted of a bid on which the house will get sold to the higest bidder. In this case the first lien mortgage ended up "buying" or I should say, keeping the property (because the value of the property itself is higher than what its owed to them), but if they "bought" the property back, doesn't that money suppose to cover the balance of the first lien and the remainder should be going to cover some of the secon lien? Right of redemption is not an option in TX and from what I can tell the second lien mortgage knows nothing about the foreclosure at this point.
0 votes Thank Flag Link Thu Jun 10, 2010

Nobody has answered your question because it is a little confusing. I will try to answer if your property went to foreclosure then there was a minimum bid which is usually what is owed to the foreclosing lien holder. You claim it was the first. You have a second so they get nothing.

A short sale would have been if you had sold the property prior to it being foreclosed. If as you state (35K) you could have paid off the 1st in full (No Short Sale) and negotiated with the second to take the balance and requested that they consider the debt paid and not pursue you for the defiency and then purchased again in 2 years.

I do not know the foreclosure rules in TX as far right of redemption etc. Maybe you should repost your question and state what is your objecive just to make it clearer.
0 votes Thank Flag Link Mon Jun 7, 2010
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