Foreclosure in Dallas>Question Details

Ccc, Home Buyer in Dallas, TX

House next to mine is being auctioned at court house at Substitute Trustee sale. How can I buy directly from the bank.?

Asked by Ccc, Dallas, TX Sat Jul 30, 2011

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The bank does not own the home to sell it to you.

At this point in time the borrower who is behind on his payments still owns it. Because he did not pay, the trustee will sell the property at auction on Tuesday at the county courthouse.

You can approach the current owner, make an offer and if accepted, you can try to get the bank to hold off on foreclosure. They usually will not, unless the deal nets them more money than they expect through foreclosure.

Once the auction is complete, either the bank will own it or a bidder at the auction will own it. If the bank successfully buys it (by bidding what is owed on the property), then you can approach the bank about buying it. However, if they have a large number of REO (real estate owned) properties, they won't entertain selling it until it is processed to their internal asset manager.
If another bidder buys it, you can approach him about making a deal.

You can bid yourself at the auction. You will, however, need cash (money orders, cashiers checks, etc) to support your all-cash bid. No, you can't bid and then go get a mortgage loan. It is strictly cash.

By the way, this procedure is uniform across all counties in Texas (no, Ron, there are not different procedures). Please understand it is not the bank who owns - they can't sell it until they own it (you can't buy it from them right now). The trustee is selling on behalf of the owners because the bank wants to be paid. Also, the foreclosure action will wipe out all junior liens. Kim, there is nothing to check as far as liens are concerned. The title will be clear except for taxes.
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1 vote Thank Flag Link Sun Jul 31, 2011
Owner of the Equity Line of Credit showed up and took the bid to level so that they got the house. They now own it. I am out the foreclosure market and will work with social agencies to help my neighbor.Thanks for all the good advice.
0 votes Thank Flag Link Wed Aug 3, 2011
Every state has laws that pertain to this. Judicial and Non-Judicial laws. The fastest way would be to go the registered deeds office and that would provide all the information pertaining to this perticular house. The next step would be to google the house and found out if it has been previously listed, which will also provide extensive information.
0 votes Thank Flag Link Mon Aug 1, 2011

It is probably too late to buy it from the bank by anyone other than the owner, who retains the right to redeem the house up to and just after the date of the courthouse sale. I have found that the best source of information on auction rules/etiquette is provided by the auction houses themselves. And most of those have websites with easily located phone numbers. I do know that anytime an auction in our area is stated to be subject to a 2nd/3rd/4th mortgage or an IRS lien we generally stay away from those. Track down that auction house and go in with a good understanding of the property value (use worst case scenario since you don't know condition) and DO NOT bid above your pre-determined amount. Also make sure you are eligible for a loan that will fit the property condition. Best of luck.
0 votes Thank Flag Link Mon Aug 1, 2011
This is probably my last post before I hit the steps of the court house on Tuesday. I now find that along with the 65K mortgage he was given a 50K Line of credit by Chase that he now owes also. Does the auction include both of these or invalidate the line of credit debt.
It's a learning process and learn slowly.
Thanks for the help.

0 votes Thank Flag Link Mon Aug 1, 2011
Many good comments here. Also, be aware that the current owner occupant probably has not been maintaining the property and you may be walking into needed repairs that could be costly such as a new A/C unit etc. As the new potential owner you would be required to fix this ASAP under tenant right laws.
0 votes Thank Flag Link Mon Aug 1, 2011
This morning he and I talked with Chase Bank and they referred us to Substitute Trustee Marris, Patton, Lindsey or Forster of Barrett, Daffin, Frappier and Engel. Collectively they decided time was up. SoI will show up at the Court House with my cashier check payable to me to show I have the money and bid on the property on Aspenway in Coppell. If there is someone else to call, we will.

My greatest concern is that if I get the bid that there are no hidden fees, liens or processes will complicate pocession. Fortunately I am in a position to lease it to him for at a price for a while that covers only taxes and insurance. Time has run out.
0 votes Thank Flag Link Mon Aug 1, 2011

Probably time has run to let bank foreclose and then purchase as REO.
You may be able to buy it before the evict, if you want to rent back to the current owner.
Then again if he is not paying the bank, will he pay you?

If you can give me the address I don't mind looking it up and trying to figure out who the right
person might be to speak with.
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0 votes Thank Flag Link Mon Aug 1, 2011
Bruce Lynn, Real Estate Pro in Coppell, TX
I appreciate all the good assistance. I became aware of the situation Friday and now only have today to try to talk to the owner bank of the mortgage (JPMorganChase); visit with the owner to see what he wants to do; and withdraw my cash. As I understand it CASH can be Cashier Checks. Should I try to contact the law firm handling the sell at the court house for the bank?
How will I know if there are liens, etc? Obviously, I'm way out of my league with time running out (sounds like Congress). I would hate for my neighbor to be put out on the street this summer. He has basically given up. You each seem very knowledgeable, helpful, and of good will. Thanks.
0 votes Thank Flag Link Mon Aug 1, 2011
No, Kim, the foreclosure sale wipes out all junior liens. They no longer exist, period.

The priority of liens is government (tax) liens, "first" mortgage lien, "second" mortgage, HOA, mechanics, etc. A higher priority lien's being foreclosed will invalidate the lower liens. So, if the HOA forecloses, they do take title to the property, but subject to the taxes and mortgages.

The first lienholder often pays the taxes in order not to have a tax foreclosure wipe out the mortgage lien. The mortgage company then adds the amount of the taxes to total due for the mortgage balance.

As a side note, the HOA actually has a higher priority but most CCRs contain a subordination clause that automatically places the HOA's claims behind the purchase-money mortgage lien. This is included in the HOA documents because most banks simply won't lend if someone else (besides the government and them) can foreclose. I have heard of one HOA that refuses to subordinate.

Some foreclosures occur with a redemption period following the sale, meaning the owner can pay off the amount that was foreclosed for, plus some fees and get title back. This is not true of a mortgagee's trustee sale.
A strange occurrence can be that the HOA forecloses, and then because the HOA doesn't pay the first or second mortgage, they get foreclosed on, too. If the HOA sells at auction and an investor buys the redeemable title, he faces the same situation. He can be foreclosed on by the mortgage company for non-payment.
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0 votes Thank Flag Link Sun Jul 31, 2011
TE, thanks for the feedback. My comment was pointed toward Ccc purchasing the home at auction. If he purchases at the trustee's sale, the property isn't foreclosed by the lender and any additional liens are still attached, correct? If the lender takes the home back, then it is truly "foreclosed" by their trustee and other liens are wiped clean. I suppose my point is that if he buys at sale, he has to purchase subject to the other liens, and the lender doesn't. If he doesn't pay off all of the liens he can't get clear title - he isn't the foreclosing party. Correct me if I am wrong and looking forward to your reply, thanks, Kim
0 votes Thank Flag Link Sun Jul 31, 2011
If you have cash, then pursue it by calling the bank directly, you might have good chance to go through intermediary. If not, wait some days to get it in the market by Realtor, prepare to get pre-approved by then and make your best offer. There are some restrictions from the lender side as well.

Faizur Rahman, Ph.D. SFR
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0 votes Thank Flag Link Sat Jul 30, 2011
As many have said, you can go to the trustee's sale and buy the home for cash. But make sure you know all of the liens that are currently on the property - all of the liens must be paid off to obtain clear title to the home. Since the lender is in lien position 1, they can take the property back subject to the liens and work on getting those cleared off before they market the home to investors or to the public. Most individuals don't have the knowledge, experience or ability to do what the lender needs to do to be able to offer a clear title to a new buyer. Buying at auction is not for the weak of heart - it is fraught with problems for most people.

To buy directly from the bank, you need to talk to the trustee - and they may not want to talk with you. If the bank stands to make more money by foreclosing and re-selling at a later date, then that is what they will do.
0 votes Thank Flag Link Sat Jul 30, 2011
Here in Texas (specifically DFW) the county court house has the auction the 1st Tuesday from 9-1pm and a 2nd auction from 1-4pm. You will need to look up facts that let you know which auction it will be at. In *very rare circstances will you be able to buy it if the property is not for sale with a listing agent who can help close the transaction. If you want to buy it from the bank, you wil have to wait approx 60-120 days after the auction for the property to be listed by a realtor. Then you can buy it from the bank. I've spent a lot of timing helping clients find a way to buy these bank owned homes here in the Dallas Metroplex.
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0 votes Thank Flag Link Sat Jul 30, 2011
Go to the auction, that is where the bank is selling the home!
0 votes Thank Flag Link Sat Jul 30, 2011
You might not ever be able to purchase from the bank . It all depends if goes into a lot for investors to purchase.

IF not

Then wait for bank process it can be weeks up to months OR year prior to getting the home through all the lender processing systems.

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Sat Jul 30, 2011
You would have to go down there and make a bid.
Understand that this is complicated; every County in the US probably has a different procedure:
Mostly they just want cash, on the spot.
You might need to do some research first.
You probably will not get a Low-Ball offer through.

Good luck and may God bless
0 votes Thank Flag Link Sat Jul 30, 2011
Some banks will negotiate prior to the Trustee auction or may have an intermediary you can work with, which makes it much easier. Give them a call--it can't hurt.
0 votes Thank Flag Link Sat Jul 30, 2011
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