researching foreclosure files at county courthouse
I am confused looking at foreclosure files at the county courthouse. What information should I expect to gather from these files.
I am very new to REI, so as a learning tool, I decided to pick a property, do some research and watch how it progresses.
I found a "New Action" foreclosure in the Law bulletin for a judgement amount of $45K on a property I know is worth $250-$270K. When I went to the courthouse to view the files. I found that the $45K appeared to be an equity loan and the paperwork mentioned another foreclosure a month earlier for $150K. I pulled that file and it appears to me to be the original mortgage. Both of these judgements are still a lot less than I know the value of the property to be. Any advise on where to go next for more info??[ Edited by dmb on Date 01/24/2003 ]
hi dmb
I'm not an expert..but I'll give you my take on it and maybe the pros can correct me if I'm wrong..the way I look at it is that the lender of the equity loan is just filing for the sake of getting their money plus some headache money (for having a non-performing loan on their books)in case the homeowner sells the house before it's foreclosed on by the first lender
of course this lender knows it's irrelevant if in fact the primary lender does take possession because all junior liens will disappear(other than tax liens)..also if you look on the primary foreclosure notice at the defendants section, you will see all people and companies listed that may have a vested interest in the property.which if it lists a lending institution, usually tells you how many liens are on the property..a few other ways to tell is just call and speak with the owner about purchasing it and get him talking and he may tell you all the liens on it..or if your really serious about it and dont mind spending the money, you could have a title company run a title search on it...does this sound right guys?
cmon101,
I'm really new to this too. Wouldn't you expect the holder of the second to go to the auction and bid it up above the $150K so that they can take their money out? Especially if dmb is right about the FMV.
Jom
Jom is correct. The junior bene showing up at the auction and bidding to protect their interest is a very real possibility, although not real common.
Personally, I would approach the owner with an offer to buy the house. You say the house comps for $250-270. I would knock off 10% of the lowest figure right off the bat. That brings the comp to $225. It is encumbered at $195. That leaves $30 to do an equity split with the owner. $15 to you, $15 to him. In essence, you offer $210 for the property. He doesn't get foreclosed on and walks away with $15K, the banks are happy because they got their money, and you just bought a house with at least $40K equity in it. This is just one example of a win-win solution.
Hope this helps.
[addsig]
Thanks for all the replys. I'm going to review the file again and get names and numbers. I expect that something happened with this property already if my FMV is accurate. I'll post again when I have more questions (I could wear out 3 keyboards with all the questions I have)