Foreclosure in Tracy>Question Details

Gerald, Other/Just Looking in Tracy, CA

Will I hear from my 1st Mortgage company or HELOC lender after my foreclosed property was auctioned off?

Asked by Gerald, Tracy, CA Tue Mar 3, 2009

I left the house way before it auctioned off. I foreclosed the property through 1st mortgage. I have a HELOC, which I'm still paying and never defaulted. I have not heard from 1st mortgage lender nor HELOC lender about the property after the auction date. Both lender know my current contact info. Reason I asked, I need to know if the property is an REO, or sold for more than my balance. At least according to Zillow, the property recently sold for $30K more than my balance. How is this possible anyway? Thanks in advance.

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You are certainly a rare bird! I don't hear many stories where the homeowner vacates their property and continues to pay their 2nd or 3rd mortgages on time! Very interesting. I can tell you are a very honest and ethical man.

Your HELOC loan is now categorized as an "unsecured loan" as the collateral no longer exists or was sold at the foreclosure sale. The flow of proceeds that arise from a foreclosure sale when the first trust deed holder forecloses covers any property taxes, special assessments or gov't backed loans attached to the property first then will pay the balance to the first trust deed holder to cover the remaining principal balance of the loan, past due interest expense, late fees, attorney's fees, trustee's fees and misc. foreclosure fees. Then if there are any proceeds still available the second trust deed holder would receive the balance.

The property is now defined as a foreclosed property with a new ownership interest named on the trustee's deed of record. If the property sold at the sale for more than the "opening bid" amount as dictated on your notice of trustee sale you received and again updated and announced at the trustee sale itself then there is a good chance that a private party purchased your home.

If a private party purchased your home then it is treated the same as if a private party were to take title through an escrow except without any warranties or the added value of a title insurance policy. If no one was at the sale to bid on the property then it would simply revert back to the beneficiary or the named creditor that holds your first trust deed. In that case it would be referred to as an REO (real estate owned) and marketed for sale by the lending institution's real estate department.

You can go to your county's recorders office and ask for a copy of the recorded trustee's deed from the sale to see who owns the property now and you can calculate how much the property sold for by the verbiage in the trustee's deed or by the amount of tax stamps paid at recording. Ask the clerk for the formula to figure the sales price for you.

That should give you the answers to your questions. I hope I helped. Oh! Be sure to find out if your second trust deed holder was paid anything through the sale as it will certainly reduce the principal balance on your HELOC loan. Good luck!

Diane Wheatley, Broker
(909) 981-5589
0 votes Thank Flag Link Wed Mar 4, 2009
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