Than What Is Owed?
Q: I was confused when I learned that the lender can also bid at a foreclosure auction. I thought the lender owned the property when the borrower defaulted. Who is the seller? (The county?) Also, if I buy a pre-foreclosure, can I try to offer the lender less than what is owed? Do they make these types of deals? Any recommendations on what is an offer they would consider (e,g, 80%)?. If I do make this offer, who do I make it to - the lender or the law firm representing them?
A: the seller is the bank that holds the mortgage. But, they can bid on it too. They own a lien. they are foreclosing to own a deed. If someone owes them $87,032 on a house 9after late fes and atty charges) they will bid that amount as the opening at the auction. Basically, that is the ct of foreclosing. they are saying "This person has defaulted and owes us $87,032. We are taking the house back, for that price of $87,032. Does ayone else want to own this house INSTEAD of us, and are willing to pay $87,033?" If someone bids that, then the deed is given to the bidder, the money is given to the bank, and the lien is paid off. The person paying it off (the bidder) owns the house, since they bought the foreclosed bid for $87,033. They HAVE to bid on the sale though, in order to establish a price. Otherwise, they could get one guy show up and offer $100, and they would give him the title and he would own the house. Shoot, we ALL woudl go into foreclosure, and bid on each other's houses to get them at great prices. SO, the bank bids the amount due. At ALL auctions. Now, they ALSO can bid HIGHER if they WANT. Many banks do NOT, even if the house is worth $130,000 and the amount due is still $87,034. SOme DO, because if they can buy it for $90,000 they can make a profit by selling