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Old September 17th, 2012, 12:52 PM   #1
Rainbird1099
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Foreclosure process questions

So my wife and I put an offer in on a house. It is listed as a short sale, the seller accepted, and we are waiting to hear from the bank.
I drove by the house yesterday, and noticed a letter taped to the door, stating it was going to a forclosure auction next month at the County courthouse.
We have already left our ernest money deposit, and paid for an inspection.

My concern is will the house be sold at the auction, and we are SOL?
Can I go to the auction, and buy the house (hopefully for less)?

My real estate agent is telling me that the bank will probably bid what is owed so they keep the house.
Isn't the bank the one auctioning the house?

Looking for some help if anyone has experience in this process.
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Old September 17th, 2012, 01:07 PM   #2
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Is the house going up for tax foreclosure or is it the mortgage being foreclosed? Fall tis the season for tax foreclosure auctions for many of the counties in Michigan.

Regardless of whether it is a tax foreclosure or a mortgage foreclosure, you can indeed go to the county and place a bid. Check with the county treasurer's office as most counties require you to register first in order to bid. And some require you to pay a small registration fee ($10 - $20). Also, be sure to read the county's bidding requirements because most will require that the winning bidder pay the entire amount by COB on the day of the auction.
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Old September 17th, 2012, 02:01 PM   #3
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If it was a tax foreclosure it would have been foreclosed on by the county many months ago so I would have to assume it's a foreclosure by the bank. Tax auctions also are usually not held at the courthouse from what I have seen.

From what I've been told the bank will usually bid what is owed on the mortgage, then it seems they will list it for much less once they get it back on the market. Why don't they just take reasonable bid at the auction?
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Old September 17th, 2012, 02:18 PM   #4
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Sometimes, these are cash only type situations, or you have to go through the auction house preferred lender. Good luck.
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Old September 17th, 2012, 04:58 PM   #5
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Never pay for anything, until you have bank approval. Kiss your inspection money good bye.
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Old September 18th, 2012, 04:52 PM   #6
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I called the county, and the firm representing the bank in the forclosure auction. I found that you need a cashiers check for the minimum (or starting) bid amount.
The starting amount is determined by what is owed on the house; for example if there is a primary mortgage for $332,000, a second for $92,000 + any outstanding taxes, the auction will start at that amount.
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Old September 19th, 2012, 02:58 PM   #7
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I don't see how they would have any buyers. Most houses are upside down, plus you add on the cost of back taxes if there are any and the house is way upside down. If they were not upside do the people would have sold them instead of shortsale/foreclosure.

This could be an example:
House bought in 2006 for 200K.
Outstanding mortgage(s) amount of 190K
House value is 120K
Back taxes 5K

So bidding on a 120K house would have to start at 195k?
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Old September 19th, 2012, 03:22 PM   #8
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I have heard that some foreclosures are going to start going through the county courthouse. I am interested in knowing more about it if someone here has more info.........
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Old September 19th, 2012, 03:33 PM   #9
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If this is the Sheriff's Sale auction you're talking about then it's part of the foreclosure process but not necessarily the end or a deal breaker. I bought a short sale house in March that was going through the foreclosure process. It had been on the market since the previous March, the owners hadn't made payments in a long time, and it went into the foreclosure process. It sold at Sheriff's Sale auction in July of last year. 90% of the time the bank buys the house back for what is owed. I don't remember the exact details, but I know that's how it goes the vast majority of the time. Since the previous owners were still living in the house, they had a year after the Sheriff's Sale before they had to be gone. So it would have been July of this year before it was fully foreclosed and emptied. My short sale went through, I got the house for over $70k less than was owed(and what the bank bought it for at the Sheriff's Sale), and I was moved into the house in the beginning of March.
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Old September 19th, 2012, 05:24 PM   #10
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Quote:
Originally Posted by TJJEEP View Post
So bidding on a 120K house would have to start at 195k?
correct. that's why the overwhelming majority of houses that are in arrears end up as REO properties on various bank's balance sheets until they can either offload them to a subsidiary for disposal or farm them out to a contracted service.

back in the day, when zero down, interest only loans were a "sounds too good to be true" scheme and people actually had to put down a serious nut to purchase a house, and property values were increasing modestly every year one could find properties now and again at auction at Sheriff's Auctions that would sell for more than the balance owed.

The bank would deduct various fees, and the overages were technically supposed to be remitted back to the defaulted borrower.

Similarly to vehicle repo auctions. Again, back in those days my best friend's Dad died - his 3/4 ton truck had a balance due of something like $8k. The credit union repo'ed it during the probate period (Scotty surrendered it with the keys) - it was auctioned for $19k and the balance minus some fees was remitted to the estate.
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Old January 7th, 2013, 07:07 AM   #11
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i have a house that i have been renting for 5 or so years, always getting dirtbag renters. i said screw it after the last renters got over $2000 down and am letting the house go back. just got my notice yesterday that house is to be auctioned on tuesday at the courthouse, sounds like there is no need for me to attend?
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Old January 7th, 2013, 03:20 PM   #12
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Quote:
Originally Posted by marshall View Post
i have a house that i have been renting for 5 or so years, always getting dirtbag renters. i said screw it after the last renters got over $2000 down and am letting the house go back. just got my notice yesterday that house is to be auctioned on tuesday at the courthouse, sounds like there is no need for me to attend?
no need for you to attend. even if a private party buys the house, you will still have redemption rights (With heavy interest accruals) should you wish to for some reason try to keep it.
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