Bidding On Behalf Of Owner
This question is targeted to Illinois auctions but responses from other interest bid down states is welcome. The question is whether it is illegal, fradulent or barred to bid on the behalf of a property owner to hopefully drive their interest rate down. The purpose is to help a friend not have to pay a high rate and still have some collateral. If I had to keep the lien then that is of course a risk and is not ment to bypass the system.
team_co_op--(IL)--------------
I suggest you talk to the tax collector or treasurer and ask the impact of the lower interest rate on what the property owner pays. It may be--and I don't know that it is--that the owner still pays the maximum interest rate, with the county or other taxing entity getting the difference between the maximum and the amount to which the lien holder bids it down.
You might be better advised just to loan the owner money to pay the taxes and get a note, secured against the property with a security instrument.
Good Investing*******Ron Starr************[ Edited by RonaldStarr on Date 05/06/2004 ]
In Illinois the property owner gets a great deal, especially in a competitive county because they only pay what the investor bids.
Quote:
On 2004-05-06 15:57, team_co_op wrote:
This question is targeted to Illinois auctions but responses from other interest bid down states is welcome. The question is whether it is illegal, fradulent or barred to bid on the behalf of a property owner to hopefully drive their interest rate down. The purpose is to help a friend not have to pay a high rate and still have some collateral. If I had to keep the lien then that is of course a risk and is not ment to bypass the system.
If I understand you correctly, you just want to bid to force the interest rate down but do not wish to actually buy the certificate. Otherwise, if you didn't mind holding the certificate, you would just loan your friend the money to pay his taxes. You want someone else to buy it at a lower rate. If this is what you are contemplating, it is a criminal act to attempt to alter the natural bidding process at any auction. If proven, you might just be sharing a cell with a guy named Bubba.