Foreclosure in San Francisco>Question Details

Eric Wu, Home Buyer in Russian Hill, San Fr...

How does a bank decide whether to allow a property to go to auction or sell it as a foreclosure on MLS?

Asked by Eric Wu, Russian Hill, San Francisco, CA Thu Jul 21, 2011

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They all got to auction. When the reserve price is not met at the auction, the bank buys the property and brings it back later on as a REO listing on the MLS.
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2 votes Thank Flag Link Thu Jul 21, 2011

My understanding is that once they get the BPO's they evaluate all the current revenues to offer a loan mod or approve a short sale against revenues recieved if they let the property slide to foreclosure. It's a net present value calculation.
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1 vote Thank Flag Link Thu Jul 21, 2011
First it goes to auction, which, as previously written, is the foreclosure. Then the bank has a Realtor list it for sale on the MLS.
0 votes Thank Flag Link Fri Jul 22, 2011
The bank has a Broker price opinion (BPO) done prior to the trustee sale on the court house steps to determine the minimum bid. If there is no bid, the lender takes the property into inventory and then they have a Broker list the property on the MLS as an REO.

NOTE: If you are thinking about buying properties on the court house steps, be very careful. Even the pros get burned once in a while and it can be very costly.

Hope that helps?

0 votes Thank Flag Link Thu Jul 21, 2011
The foreclosure IS the auction. At the foreclosure the banks "initial bid" is the amount owed to them, if no takers are willing to put up the amount of the loan as the minimum opening bid, then the "highest bidder," the lender will get the house. After that, they can do what they want with the house, but because they have some internal insurance and other types of safety measures against such losses (remember houses are worth much less now than the loan balance may be), then they can sell the house for what the market will bear (REO). Short sales come before the auction deadline, typically.
0 votes Thank Flag Link Thu Jul 21, 2011
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