Which Bank Do You Think Will Buy this House At The Sherrif's Auction?

 Who do you think will buy the house at the sherrif's auction?

Bank 1 - $ 415,000 (foreclosing entity)
Bank 2 - $  50,000
Probably $ 6,000 in back taxes

House probably worth $ 435- 440,000

What is the typical amount a bank would be willing to lose to avoid
buying a house?

Thanks,
FSK

 

Assuming Bank #1 is holding a 1st mortgage and Bank #2 is holding a
second.  Being bank #1 is the one foreclosing, they have a judgment for
the total amount owed.  They will probably bid the judgment as it will
not cost them anything to do that. Bank #2 will get wiped out in the
process. If bank #2 was to bid to protect their mortgage, they will need
to outbid bank #1. It would be to bank #1's advantage to stop bidding
around $$400K to $410K. That way, the least they lose is $5K to $15K and
bank #2 takes on any remaining risk of ownership and the expense of
sale. If bank #1 had played the game right, they would have waited and
let bank #2 foreclose on their second mortgage. That way, the sale on
the courthouse steps would have still been subject to the first
mortgage.

 
I am still interested in buying the house.  I bid $ 430, but the short
sale was rejected by Bank#1, probably because of the outstanding $ 50
lien of Bank #2.

Given the details, what would you suggest? Thanks.

 

I suggest, you go talk to bank #2 and find out their intentions. Offer
them $15K for their 2nd place note and see what they do. The fact that
Bank #1 rejected your offer indicates that they are prepared to wait
till it hits the courthouse steps. They figure you will be there. If you
are, they will recover their entire judgment and Bank #2 will have to
decide if they are going to shit or get off of the pot. Either way Bank
#1 is in an excellent position.

 On Fri, 23 Feb 2007 22:35:54 -0500, someone wrote:


Yeah great, he's paid $15k for something that may well be worth zip
nada nothing zero.

Let the banks get everything squared away, with the junior lien wiped
out, and then if you like the price at the resale buy it.  And if you
don't, then buy something else.  Hard to believe from here that this
house is so very special that you just have to got to buy it (and play
games that you could lose in order to do it).


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