Each week, the CRR blog will be providing answers
to the most common and important foreclosure questions.
This question is the most basic, and most commonly asked.
It assumes that there is only one BEST answer.
This is not always true.
Every foreclosure is a dynamic process.
It begins with a borrower/owner falling behind on property payments.
The lender contacts the borrower and reminds them to make the payments.
Eventually it becomes evident that the borrower does not intend to do so.
In California, the lender will first notify the borrower that foreclosure is imminent.
This takes 30 days.
Next, the lender will send a Notice of Default.
This starts the actual foreclosure process.
It contains the default amount, or past due payment balance.
It also contains the “As of” date, when the foreclosure began.
The lender cannot schedule an auction for 90 days.
At the end of the 90 days, the lender sends a Notice of Trustee Sale.
The date of the auction usually falls 21 days later.
These are the basics of any foreclosure.
Any time before the auction, you can make an offer to the borrower/owner.
If the loans are LESS than you think the property is worth, make an offer “subject to” the existing loans.
If the loans are GREATER than you think its worth, make a “short sale” offer.
Any time BEFORE the auction, you can buy from the person in default.
If your offer is not accepted, that is ok.
Look at the loans on the property again.
If it goes to auction, which loan is foreclosing?
Which loans will be wiped out?
If they “drop” the bid, which they often do at auction, will the price be right?
If so, then be ready.
Get a cashier’s check and be at the courthouse steps.
Then you are thinking.
Call us if you do not understand any aspect of this process.
We will explain the auction to you.
If it is a bargain, you’ll know.
Not sure? Don’t bid.
Make sure you check all the loans and liens before you make the decision to bid.
That means double-check whatever source you have for your loan info.
Don’t guess… There are no do-overs.
But the auctions are where the best sale prices happen today.
You can save as much as 75% off the original foreclosing loan amount.
Today that translates into somewhere around half the comparable value, or more.
We have seen deals that are truly amazing.
But don’t worry if the auction isn’t for you.
Any time after the auction, you can offer to buy a property from the new owner.
If no one else bids at auction, the foreclosing lender is the “winner”.
The lender is the new owner at this point.
Make them an offer!
The worst that can happen is they say no.
You will be surprised at what they are willing to accept.
You will likely get an answer close to where you want to be.
Don’t let a realtor make you shy.
Make the offer.
Remember that banks foreclose because they need money.
They do not need or want the property.
If the loan amounts are too high and you choose not to bid at auction, the REO offer could become your method of choice.
These are you general methods, and there is never only one path.
Look at the property profile.
Let the facts guide you.
And ask questions.
More to follow…..