Sheriff Sale? If 2nd Is Foreclosing- How Do I Find Out 1st Mtg Balance?
Sale this Wednesday. The second is 25K and is foreclosing. The 1st was in 3/98. 30 yr amort. for 60,050. I didnt see interest rate.
I am not in contact with owner, just looking at court house docs. If I buy subject to first, how much am I biting off. I would guess 50K+, but it is only a guess.
Help please......
ItzME
I am new to REI but from what I understand there is no real way to know the balance. Even when I get title opinions done (I'm in Iowa--I think this is similar to getting Title Insurance) the opinion simply states what you provided.
Although this isn't the answer you are looking for I hope this helps.
Do not attend a foreclosure sale with insuficient information. You should know the unpaid balance on the lst, the Int. rate and status of payment. I also look for items like subordination clauses etc. How to find out. Begin, call title Co. get a copy of the recorded Deed of Trust or Mortgage. Check the fine print. Then having identified the Lender (Present) call them identify yourself as interested in a second mortgage junior to theirs ask the balance due, the payments and the interest rate. If they refuse I give them a bar number identify as an attorney and ask the questions again and if still having problems start up the chain of command. You can always have an attorney do this for you. Assuming you strike out. This is probably evidence of a game being paid, er played. Then examine the recorded copy of the trust deed or mortgage, upper left and call the escrow company, quote the escrow and title order number also on the instrument somewhere. They probably have all the information on the lst even if it was assumed. Remember the purpose of an escrow company is to expose everything they have been instructed to examine and hold. Now you are set. Go to the bank, borrow on your CD's or a 90 day loan. Divide your funds into two or three checks of various amounts and go to the sale and qualify and start bidding. I assume you have looked at the property and know its condition and value. When you attend a sale, do not bid from notes but from information you have stored somewhere between your ears. This keeps you from tipping. If you see a rote bidder (person that bids $10 over each increased bid.) Jump bid a much larger increase. Smile and jump the same again. Do not express nervousness and be casual. Oh yes, I am the guy with the quavering voice trembling in my boots, just ignore me.
Now this took some time to write out. Sorry I just don't know how to do it in any more condensed form. Get Rich, and enjoy yourself, it is really a kick. Lucius
Thanks for taking the time for a legnthly reply! Very helpful information. I skinned the cat another way. I got the Social Security # from the mortgage and ran a credit report. Balances are what I guessed 25k second and 55.8k first. Interesting....both held by the same mortgagee...Countrywide. Property is in excellent condition. FMV around 150K. I hope they have it set up with bidding "subject to" the first. This typically leaves many feeling ignorant (I know from experience).
I like your bidding strategy. There is one PRO who uses it very effectively. I plan on giving her a run for the money by performing my due diligence.
I do realize the the mortgage balances do not include sales costs and attorney fees, but I have plenty of room.
I am new to this forum and appreciate your assistance! THANKS
ItzMe
Additional considerations. In Calif. the Trustee conducting the sale gives a starting bid which includes all costs to date. You can obtain the starting bid by calling the Trustee day before sale and he must give you that information. Another, Dear Sweet CountryWide, check the recording date of lst and second. Sometimes they try and hook both together. Reason for the two instruments is because they can sock it to the buyer on the interest of the second, cause they are over 80% of purchase price on second. It is sort of helpful cause by looking at the dates of recordation of the two instruments you can check market increase from that date and thus check your True Value of Property as of this foreclosure sale date. Is the prior owner (soon to be) still in property? Will you have to file an Unlawful detainer action to get them out? or can you merely help them in moving and thus lower your cost of eviction? I become very helpful and understanding at this time.
Cheers, Lucius
Hey,
The owner is still in the property. The sheriff will evict after the sale if the buyer requests it. So that has not been a problem.
I spoke to the auctioneer and she informed me that the attorney representing the 2nd mortgagee has the option of selling subject to, or providing complete payout information. Yes, it is at the attorneys descretion!
Typically, the sales are conducted one of two ways: with/without appraisal. If without, the sale starts with cost $. Usually around 1-3K. If with appraisal, it starts at 2/3 of appraisal and goes from there.
About 50% of the sales are cancelled. This is announced before the sales begin. Some are also announced as bankrubpt. I wonder how many of the cancellations are acutally cured and how many are short sales.
ItzMe