Can you buy your own home at foreclosure?

[HHM]

This is all theoretical...the bottom line, despite mnfisherman's post (with only 3 posts to his credit), banks do not bid the property for less than the amount owed unless required to do so by law. Some states actually require the minimum bid to be 75% of the first mortgage balance.

No one actually bids at foreclosure auctions in this market because the bid is almost always higher than fair market value; and given the funding requirements, none but the true investors can even afford to bid.

Bottom line, you are not going to pick your house up at foreclosure auction without the help of a rich relative willing to make a bad deal on the house.

[pcn]

So all this that I read about people buying foreclosures at bargain prices are just myths?

What then is the point of the sale? Just to fulfill a legal requirement so the bank can take possession and make an insurance claim?

[justbroke]

So all this that I read about people buying foreclosures at bargain prices are just myths?

No. On a home which has EQUITY, you can get a bargain price. However, a home that is underwater, will be "protected" from a low bid by the lienholder.

What then is the point of the sale? Just to fulfill a legal requirement so the bank can take possession and make an insurance claim?

The real point of the sale is based on commonlaw and is the way the bank gets legal title to the property. This is why only savvy investors go to these and do their research before. I don't think I'd personally bid on an underwater property. I'd be looking for the TAX and HOA sales for a true investment!

[tigergem]

Huh. Here in Texas there is a charity that will buy homes at foreclosure and sell them back to the original owners for the auction price. It started out as one lady who just did it out of the kindness of her heart for a neighbor - - because she could, and then she turned the endeavor into a non profit agency.

[HHM]

I read the posts you linked, they appear to be VERY GENERAL and outdated.

Most investors pick up the foreclosure after they have gone to REO status. (real estate owned, by the bank). And as just broke pointed out, the only way to pick up a good deal is to bid on a home with equity, which is rare in the foreclosure market.

I am not trying to discourage you, but I am trying to be realistic. I hope this works out for you, I really do. But your best shot is probably just to let the house go, and buy in 2-3 years. Prices really are not going up.

[pcn]

HHM, I do appreciate the advice. I might be looking too far out, trying to cover all the bases. I don't even really know at this point that it will come to foreclosure. Our hope is being able to negotiate with the 2nd to settle before it gets to the point of foreclosure.

Is foreclosure a given once an "Intent to Accelerate" notice is sent?

[pelicula]

Bying HOA foreclosure at the auction?

Please explain. Why is buying HOA condo forcosure at the auction is a good idea?
In my casse my condo still has mortgage attached (first lien) when it was bought by a third party (some investment LLC). The bank already filed a Lis Pendins against this property(before the HOA auction) and the third party still bought it.

WAS IS THEIR INTEREST IN THIS CONDO? Won't the bank come after this property eventually??

I was already chap7 discharged before the HOA foreclosure.

Thank you

[justbroke]

Please explain. Why is buying HOA condo forcosure at the auction is a good idea?

Of course, if you're an investor, you really need to know what you're doing. HOA foreclosures may actually allow you to purchase a property for just the HOA past-due amounts. The property is still encumbered by the mortgages. You still need to do your homework and see if purchasing the HOA/TAX foreclosure property is worth it in the long run. You still need to deal with the lienholders.

What you're really hoping for in an HOA or TAX foreclosure, is that the property is already paid off or mostly paid off!

[HHM]

So all this that I read about people buying foreclosures at bargain prices are just myths?

What then is the point of the sale? Just to fulfill a legal requirement so the bank can take possession and make an insurance claim?

My sense is, since we are talking about your 2nd mortgage, they are following standard procedure with the letters, but when it comes time to put up or shut up, they will probably shut up when it comes to actually foreclosing.

[bulletproof77]

I know in California, the "arm's length" requirement is strictly enforced. We can use my "old" house as an example. First was 170K, second was 30K. At the foreclosure sale, the bank was the only bidder and bid the full amount of 200K, even though a second is wiped out by a foreclosure. My brother attempted to bid, but the bottom line was that he still had to pay 200K for a home that was worth only 120K at the time of foreclosure. Sentiment aside, it was a nice gesture, but I would not allow him to complete his bid and throw good money after bad. The end result is my former house is now listed for sale at the current market value of 115K as REO by the bank through a local Realtor. Since I discharged both mortgages through Chapter 7, the investors got paid through PMI, I'm off the hook for an underwater property and everybody is "happy"...House still sits vacant after numerous open houses etc..because the bank will not budge on the price and here in San Bernardino County, no-one is buying anything.

[catleg]

For a lot of good info about REO's I follow this website of a realtor in the north county San Diego area .. Jim the realtor.. he's awesome.

Jim TV

[mnfisherman]

If a bank bids a market bid on house in some states you have 6 months to redeem it for there bid.If you have only one loan your in good shape.But if you have a 2nd they have a lein on it still.If someone out bids the bank at the sherriff sale the home owner and anyone else that has leins can buy for that amount within 6 months.after they 6 month redemption period the homeowner is out and the person wins the bid takes full ownership of house free and clear. Banks are sometimes bidding market which makes since for them to take there loss sooner than later.It is cheaper for them to dump it quicker without waiting the 6 month redemption period,having to repair house and paying the fee's to sell it. There are very few people who would ever get a investor to help them if you are losing the house. I

[BCA2009]

The handful of courthouse auctions I've been to in Florida, always started with an opening bid of $100. But I never saw an investor actually buy a house. The bank representative would outbid the investors by a few hundred dollars a couple of times, then if the investor kept bidding the bank would jump to some much higher predeterimed amount listed on his/her clipboard( Payoff amount???).

I would think logically that the bank would have some breakeven point at which they would let the property go, even if it was less than the payoff amount. But banks are not know to be logical. In florida there is no law that says the payoff amount or any % of it must be bid. It says the property will be sold to the highest bidder on the courthouse steps. I always assumed that the bank wanted to keep the auction price low due to recording taxes that are based on sale price, but I don't know for sure.


Back to the OP's issue of a relative buying the property. there are certainly legitmate reasons for family to by the property back. Especially if it is "family land" that joins other relatives' property. And why couldn't they go to the auction and just bid for it? An public auction is by definition an arms length transaction.