Caveat Emptor: 2nd Mortgage Foreclosures

[Starving Steve]

Re: Caveat Emptor: 2nd Mortgage Foreclosures

WHY should YOU, the cash buyer, have to do work to buy a so-called, "bargain"???????????????????? That is "the California attitude", i.e, that they are doing you a favour by selling you California real estate..... The lesson is TO NOT PLAY THEIR GAME; YOU MAKE THE RULES, NOT THEM.

In Canada, when you buy a clear title, they give YOU, not a title company, not a lawyer, not an agent, A PHYSICAL CLEAR TITLE THAT YOU CAN TAKE HOME WITH YOU AND PUT ON YOUR WALL. You can eat your supper with your clear-title next to you, and next to your $20 gold piece. And in Canada, they don't talk legal mumbo-jumbo: NO DEEDS OF TRUST crappola. You get a PHYSICAL TITLE. It is called "A CLEAR TITLE".

And to think people ask me why I like Canada and why I live in Canada!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!! Yes, we have dark and cold winters. Yes, we have taxes upon taxes. BUT WE HAVE A MORE TRANSPARENT SYSTEM IN BANKING AND IN REAL ESTATE AND IN FINANCE. WE ALSO HAVE SOCIALIZED-MEDICINE, as in: YOU DON'T GET A BILL FOR MEDICAL CARE, and the medical care in Canada is better than in the US.

[swgprop]

Re: Caveat Emptor: 2nd Mortgage Foreclosures

WHY should YOU, the cash buyer, have to do work to buy a so-called, "bargain"???????????????????? That is "the California attitude", i.e, that they are doing you a favour by selling you California real estate..... The lesson is TO NOT PLAY THEIR GAME; YOU MAKE THE RULES, NOT THEM.

The objective is to buy a property at a price substantially less than fair market value. The opportunity to do so presents itself because 1. The foreclosure process is inefficient. 2. It requires substantial expertise and deep pockets to play the game 3. You are buying the property frequently without benefit of interior inspection 4. You are buying the property without title insurance, pest inspection etc.

As Karim noted the vast majority of properties are over-encumbered in today's auctions. There are opportunities on occasion when lenders reduce opening bids significantly below the amount owed to facilitate a liquidation.

In my experience bidders look to buy at or below 60-65% of market value, to allow for anticipated rehab and profit margin.

So Steve, in Canada do "they" bring these bargains to you? Sounds like a great place.

[Starving Steve]

Re: Caveat Emptor: 2nd Mortgage Foreclosures

Cash talks in Canada, and it talks in most places in the USA. The issue is: WHY DOESN'T CASH TALK IN CALIFORNIA? WHY IN CALIF. ARE SELLERS STILL IN COMMAND OF PRICES IN THE REAL ESTATE MARKET? And what really irritates me is that many of these sellers are deadbeats and fast-buck artists, but I won't get into that issue now.

From your post above, "60%-65% of market value" is no deal, and it is no deal especially when you are forced into bidding blind, without interior inspection and without title insurance, pest inspection, etc............ And what does "market value" mean, especially when government and bankers have rigged the market to dictate a value that would otherwise not exist??????????????

I would not walk-away from deals on court house steps, I WOULD RUN-AWAY from such deals. Let them keeeeeeeeeeeeeeep their properties and their "trust deed chains". To-day, it is cash, gold, and clear-title property that talks, and nothing else.
So I would stay the h*ll away from California real estate, especially now with the State in bankruptcy. And the job market in California looks to me like it is only going to get worse, especially in Silicon Valley. Gangs run wild, shoot across freeways, and set-fires to property at night--- just for enjoyment.

Sit-back and watch their California real estate ship sink. Enjoy the sight.

Where is the safety net underneath their market? Solar power paint from AMD in Santa Clara, Calif? Electric cars that cost $41,000 each from GM in Milpitas, California? Toy telephones from Apple for the rich to play with, and that still drop calls, just like the old phones? Obama's fake healthcare reform that didn't really change anything? As I said, "Enjoy the sight."

[don]

Re: Caveat Emptor: 2nd Mortgage Foreclosures

I've been to these auctions before and its always a caveat emptor type event, no one will guarantee anything and its up to you to educate yourself.... You dont need a lawyer for each and every event, you just need to know how to look at chain of title and see if you are buying the first lien or the second and if there are any other encumberances or what not..... Majority of these auctions at this point are a waste of time, bc everything is underwater and there is no equity.... So, i stopped going.

But rule of thumb... Never ever buy the second, bc you will have to pay off the first; first on title has precedent.... Thats just how it works...

It aint rocket science.... But its not like going to Edward Jones and asking them to pick an investment for you....

Can anybody correlate the foreclosure auction market and what the banks are letting out of their shadow inventory? (Can't help but think of an over inflated balloon, tightly held at the neck, emitting that high pitched sound, as the lender lets a little out at a time.)

Lot of solid postings on this thread, by the way.

[runlikehe11]

Re: Caveat Emptor: 2nd Mortgage Foreclosures

I've been to these auctions before and its always a caveat emptor type event, no one will guarantee anything and its up to you to educate yourself.... You dont need a lawyer for each and every event, you just need to know how to look at chain of title and see if you are buying the first lien or the second and if there are any other encumberances or what not..... Majority of these auctions at this point are a waste of time, bc everything is underwater and there is no equity.... So, i stopped going.

But rule of thumb... Never ever buy the second, bc you will have to pay off the first; first on title has precedent.... Thats just how it works...

It aint rocket science.... But its not like going to Edward Jones and asking them to pick an investment for you....

I am going to chime in on this subject as I was at the foreclosure auction today, I have been going for over a decade, and in Texas if they would have done a little more investigating in deed records they possibly could have known what they bid on and avoided such a mishap. The other killer is a Federal Tax lien.

(a) A trustee or substitute trustee may set reasonable conditions for conducting the public sale if the conditions are announced before bidding is opened for the first sale of the day held by the trustee or substitute trustee.
(b) A trustee or substitute trustee is not a debt collector.
(c) Notwithstanding any agreement to the contrary, a mortgagee may appoint or may authorize a mortgage servicer to appoint a substitute trustee or substitute trustees to succeed to all title, powers, and duties of the original trustee. A mortgagee or mortgage servicer may make an appointment or authorization under this subsection by power of attorney, corporate resolution, or other written instrument.
(d) A mortgage servicer may authorize an attorney to appoint a substitute trustee or substitute trustees on behalf of a mortgagee under Subsection (c).
(e) The name and a street address for a trustee or substitute trustees shall be disclosed on the notice required by Section 51.002(b).
(f) The purchase price in a sale held by a trustee or substitute trustee under this section is payable immediately on acceptance of the bid by the trustee or substitute trustee. The trustee or substitute trustee shall disburse the proceeds of the sale as provided by law.

The Lenders also are allowed the attach fees and penalties to the note. So the starting bid on many occasion has been for more than the original note was for.

By the way: In the three counties that I watch, the good deals are very few and far between.

[karim0028]

Re: Caveat Emptor: 2nd Mortgage Foreclosures

Can anybody correlate the foreclosure auction market and what the banks are letting out of their shadow inventory? (Can't help but think of an over inflated balloon, tightly held at the neck, emitting that high pitched sound, as the lender lets a little out at a time.)

Lot of solid postings on this thread, by the way.

i dont have anything scientific but i have been eyeing a couple of duplexes that were supposed to go to auction and at the auction the sale keeps getting postponed the day of the auction and have been conversing with the current owner (tried doing a shortsale) and he hasnt paid his mortgage in 14 months... Mortgage sold to BofA right before the foreclosure sale and BofA hasnt called or sent a letter in ~4 months...

BTW, the sale i went to for this property, i think 3 people were there.... Its just not worth it, no equity in 99% of the properties. Deals happen else where not at the courthouse...

[sunskyfan]

Re: Caveat Emptor: 2nd Mortgage Foreclosures

Well, I guess I got the best part . Hope all is well Raz .

[MarkL]

Re: Caveat Emptor: 2nd Mortgage Foreclosures

Sorry, I am not trying to be thick I am trying to make a point. IF we all spent our time trusting "experts" and hiring professionals to do something we wouldn't have time to produce real product. Honesty and transparency are key in optimizing processes in our complex lives we all in up doing something that is worth while for people living and dying and enjoying life. We gave built an economy based on the principle that if we make things complex we can make more money and/or dump our mistakes on someone else. I can always find an exception that allows me to act in a immoral way. Pointing out the girl is a minor is an example. Does it matter?

We can either have a world where a young couple is trying to buy a house and live near their folks so they can live a good life and meet their responsibilities or we can live in a world where we create markets where this people can screw up their lives and them and their parents become wards of the state. I think we have tried the later world and it rots around our neck and we can't stand the smell. Yes, I am exaggerating a bit here but I am reaching for clarity. Which world do you want to live in?

Yes, you are exaggerating a bit. I think phrased more appropriately, they were trying to buy a house, in non-standard circumstance, at a steal at 200k below market value, without even knowing how to walk 100 feet and check and understand the most basic courthouse records. I'd love it if the complexities of the Real Estate market didn't exist, but liens and mortages have their place in the process.

And as a former property owner in Canada and a current one in California, I can attest that while significantly different, the processes in Canada are just as complex and obtuse in their own way as California's. I think California's are more honest... but more complex. But that's one man's opinion.

[sunskyfan]

Re: Caveat Emptor: 2nd Mortgage Foreclosures

Yes, you are exaggerating a bit. I think phrased more appropriately, they were trying to buy a house, in non-standard circumstance, at a steal at 200k below market value, without even knowing how to walk 100 feet and check and understand the most basic courthouse records.

Exaggeration? Hum. $200k below market value? What does that mean now? Records? Perhaps a walk over to the newspaper would reveal that Wells Fargo has been bailed out by the government as part of a rescue of an industry that didn't keep its records straight intentionally so it could leverage more than it had. But, that's okay, let's punish the person who steps up with cash and screw them out of it since obviously it has become common practice in this country.