You may be seeing where the bid was won by the plaintiff because any bids placed on the property if there were any, were not enough to satisfy the costs accrued. At that point the property reverts back to the plaintiff or bank.
An REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction. You see, most foreclosure auctions do not even result in bids.
Foreclosure sales begin with a minimum bid that includes the loan balance, any accrued interest, plus attorney's fees and any costs associated with the foreclosure process. Since what is owed to the bank is almost always more than what the property is worth, very few foreclosure auctions result in a successful sale. Then the property "reverts" to the bank. It becomes an REO, or "real estate owned" property. The bank or servicer will then sell it as part of a pool or an individual property through our local MLS, where your brother will have a chance to make an offer on it.
Good Luck and feel free to contact me with any further questions.
RE/MAX Prestige of West Palm Beach
The real question is why not try to do a Short Sale? If you do not, the lender can file a deficiency judgement against you for 100% of their loss, including attorney fees, court costs, late fees, etc.
If you are able to get a Short Sale under the HAFA program you may also be able to get a check for $3k at closing. Most importantly HAFA required that you will be forgiven 100% of the loss. Here are details:
Do you really want the bank to repossess your car and attach your wages? Contact a Realtor and your "servicer" for your Lender, immediately and try to stop the foreclosure auction!
Hope this helps.
The bank participates in foreclosure auctions to protect their interests but are not bidding with real money. The Plaintiff (bank) has a final judgement and usually will set a price that they are willing to bid up to but put out no money to do so unless they bid higher than the judgement amount. As an example, lets say Bank A has a judgement on a property at 123 Main Street in the amount of $300,000. They have researched the property and feel the value to them in today's market is $140,000 and they will bid up to that amount. Any 3rd party can bid at the auction and if they want to bid $140,100 the bank will be happy to take their money and not proceed with the bidding.
The auction process needs to be fully understood by your brother or he may learn a hard lesson and part with some of his hard earned cash. Any party with lien rights can file a foreclosure motion and if you outbid them there may be senior liens that you will be responsible for it you want clear title to the property. It is imperative that you have a title company do a complete lien search so you know what outstanding obligations there are on that property and where the lien you are bidding on stands in that line-up.
That being said we have seen a surge in the success rate of 3rd party bidders and you might follow my blog where I update the latest information relating to the Palm Beach County Foreclosures auctions on a weekly basis. The first link below will take you the the entire blog and the second link will take you to my latest foreclosure update.
I hope this information is helpful but again please do your research as you do not want to be on the losing end in the auction process. If you or your brother have any questions please feel free to give me a call at your convenience.
Always at Your Service,
Tom Priester e-PRO
"Results Driven Real Estate"
Keller Williams Realty
Jennifer is exactly correct and outlined the process perfectly. It may not sound like it makes sense, but the bank has to see if there is anyone out there willing to buy the property for what is owed. If you were the bank, taking a huge loss, would you allow a property that is valued at $200,000 sell at auction for $100,000? Not likely. You will want to get every possible amount you can to recoup your losses.
These auctions are a minefield, becuase some people also bid on homes where the HOA filed foreclosure. In those cases, people think they own a house becuase they purchased at auctions for something like $5,000... but not aware there is the original mortgage to satisfy as well.
My question to you, though, is why would you let your property go to auction and put foreclosure on your credit? You can do a short sale and keep foreclosure off your credit. We are a professional short sale service and would be happy to explain the process to you. Please call us directly to discuss your specific situation. Our services are FREE to homeowners. We look forward to hearing from you.
Eli Givoni, Director
Short Sale Department, LLC
MARS Disclosure for General Commercial Communications
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
Banks no longer are in debt to the federal government for the bail out. They are paid up. The bank properties are not assets. They are protecting the value of their assets. They are doing this by not letting a house go at auction for less than it should...AND...they are selling at fair market value...AND...they are not flooding the market with bank owned properties that would drive down prices.
And, by the way, they are not putting up real money because they are the owners now. They are just protecting the value.
Hope this helps~
Debbie Albert, PA
Keller Williams of the Treasure Coast
If I understand the process, the reason that the lender bids- and usually they bid to protect their investment... they bid what is owed them, which may and usually is greater than it property's value. The situation may not seem right... but it is the lender, after all that took the risk.
♒WATERWAY REALTY, REALTORS®♒
http://goo.gl/JUl3W ≈✔≈ Like Us on Facebook ≈✔≈
Alma's points are very good ones.
Good luck to you,
Unwavering Commitment to Service
Bear in mind that your brother has to be careful and do his homework as once he wins a property the foreclosing bank will end the story therefor him, but there may be other liens and encumberances that may have to be negotiated and settled afterwards. Buying from a bank directly ensures a clean title http://www.sellmypbchomes.com