Author Topic: Equity/Foreclosure Auction  (Read 1889 times)

scamutz

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Equity/Foreclosure Auction
« on: September 03, 2013, 01:17:45 PM »
I went to my first foreclosure sale today - in SC they're conducted by the Master in Equity.  There was something that I didn't quite understand.  In many of the auctions, the plaintiff (bank) would enter a bit of $2500 - on about 10% of them, someone else would bid on them - at which point the bank would bid in 25k increments until they got to their max bid...or in many cases, the other bidders would drop out before they got there.  What I didn't understand, was why weren't there bids on all of them?  i.e. - if the bank has an opening bid of $100, on a $300,000 property, were the other investors just assuming that the bank wasn't going to let it go on the cheap?  I asked two different people at the auction, but they didn't seem to know either.  The big investors were pretty busy, and I didn't want to bother them.

All in all, it was a great experience - very friendly people, only about 40 in attendance for about 50 properties.  Only about 6 or 8 of them sold to anyone other than the bank.  there was one property that I was interested in for $30,000 - it was probably valued at around $70,000 be needed a lot of work.  The bank's opening bid was $68,000.  I don't quite understand that one either, I guess I'll keep watching, I assume that one will come back as an REO.

Thoughts?

TIA!

arebelspy

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Re: Equity/Foreclosure Auction
« Reply #1 on: September 03, 2013, 03:50:15 PM »
What I didn't understand, was why weren't there bids on all of them?  i.e. - if the bank has an opening bid of $100, on a $300,000 property, were the other investors just assuming that the bank wasn't going to let it go on the cheap?

My bet is they weren't first position liens.

The bank's opening bid was $68,000.  I don't quite understand that one either

Probably the amount of the lien.
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TrulyStashin

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Re: Equity/Foreclosure Auction
« Reply #2 on: September 18, 2013, 08:21:18 AM »
You can go to the land records office of the county where the property is located (or find it online, maybe) and check the recorded liens for any property you're interested in.   What you will often find is that Chase Bank has the first mortgage and Citibank has the second mortgage.  Second mortgages are "junior" to first mortgages and if the amount received at auction isn't enough to cover the second then Citibank gets nothing. 

Banks have to record a "notice of default" and you'll see that too so you'll know exactly how much the bank stands to lose on the property and that will help you anticipate what the bank will try and get at auction.