vacant foreclosed home (auctions, agent, mortgage, mortgages)

[nnyl]

Why do homes that were foreclosed sit vacant, no "for sale" sign, no "for rent" sign, nothing .

The home next to my mil, foreclosed, over a year ago. It used to be so very well taken care of and now has gone to he** in a handbasket, weeds everywhere, a pool that is unkept.

Why does it just sit vacant? Obviously the bank foreclosed on it, sometime ago.

There were renters in that home previously and obviously the homeowner was not paying the mtg. Wouldn't it have made better sense for the bank to allow the renters to stay (they were taking such good care of the place) and pay whatever it was they were paying, in rent? At least the property would've continued to be cared for.

[QIS]

Its probably tied up in second and third mortages, liens, lines of credit, utility bills, probate..possibly all of the above and possibly more!

[North Beach Person]

Plus the mortgage holders don't want to get tied up with renters. It makes more sense to them to let the house sit empty. They also don't want to declare it on their books as a bad loan.

[gsm113]

So what is keeping houses like this from selling? Surely these houses are worth something, even if it's very little.

If a house like this has so many liens, mortgages, loans, etc. don't all the debt holders lose out in the foreclosure process?

[MikeyKid]

Part of it is Shadow Inventory... It's not good business for the banks to put everything on the market at once. You'll hear some varying opinions as to WHY the banks don't throw them out on the open market immediately.

As for the renter situation - it's now required for banks to honor leases in the situations where the owner doesn't pay the mortgage. The folks shouldn't have been "thrown out", it's just likely their lease expired.

[nnyl]

Obviously I wouldn't be in a position to know all the particulars on that property. But I do know that the renters took absolutely wonderful care of the place. And when it became obvious it was being foreclosed on, they offered the bank I think it was about $124k for the home (which would be decidedly low, but who knows anymore, for that neighborhood). Only to have the bank reject that offer, and they then went on to buy a home (just down the street a block away), essentially just like it for the above price.

That same home, now sits vacant and has, for over a year now.

Just doesn't make sense to me that the bank wouldn't of let the renters stay (proof, of course, that they'd indeed been paying their rent, as contracted). Collect at least those funds, instead of nothing at all. And no one maintains the property. As a result the weeds from the yard, which are overtaking the formerly beautifully landscaped place, are now transferring into my mil's meticulous yard. The pool, the inground pool in that vacant property likely a breeding ground at this point for frogs and mosquitos.

Just doesn't make any sense.

[Tish Thompson]

In my area, vacant foreclosures sit because of legal backlogs....either the banks are inundated with making sure properties were seized legally OR the courts are backlogged with processing foreclosure paperwork. Some of the banks that own properties like this in my area have hired preservation companies to maintain the properties (weekly inspections, winterizations, keeping the grass cut)...but from what I'm seeing, these companies aren't doing a very good job.

[naeem5]

Originally Posted by nnyl

Why do homes that were foreclosed sit vacant, no "for sale" sign, no "for rent" sign, nothing .

The home next to my mil, foreclosed, over a year ago. It used to be so very well taken care of and now has gone to he** in a handbasket, weeds everywhere, a pool that is unkept.

Why does it just sit vacant? Obviously the bank foreclosed on it, sometime ago.

There were renters in that home previously and obviously the homeowner was not paying the mtg. Wouldn't it have made better sense for the bank to allow the renters to stay (they were taking such good care of the place) and pay whatever it was they were paying, in rent? At least the property would've continued to be cared for.

I passed a vacant house and looked around.
It should be:
occupied, for sale, or for rent.
I went to the property tax office and was told the 2009 taxes were paid by Bank of America. I always look on the county foreclosure auction list, so I looked. Yep, all Bank of America auctions were represented by the same law firm. I wrote them a letter to see if they knew how to contact the owners.
I then went to our county GIS search page and entered the address. Up popped the names of the owners.
Well, I wanted to buy this house thru a short sale. For that to happen, the owners and the bank have to agree. The owners moved out about a year ago. Further research on the county site showed that there was a foreclosure hearing for these owners in Jan. 2009 and Liz Pendens (sounds like the name of a porn star ) in May 2009. I asked people, what happens after Liz Pendens? They said maybe 9-10 months out, the property is auctioned at the county auctions. I watched the list every month. Month 9, 10, 11, 12 go by. We are in month 13.
It was past time for something to happen.
I went to the local Bank of America mortgage office. They gave me the name of a guy that handles their REO's. I called him. He said until it is for auction he won't be involved.
I asked him what is the foreclosure status. He said the 9-10 months after Liz Pendens is an average, and there can be various reasons for delays, usually legal. He said the owners may have declared bankruptcy.
I don't know about others, but around here, maybe a bank foreclosed, but the bank does not own it until they buy it at the auction. They pay the taxes, keep the grass cut, keep it insured because it is the only way they'll get the debt owed them on this house.
If I could find the owners, and I have offered rewards in my area, I'd tell them the facts. If your house goes to auction, foreclosure will be on your record for maybe up to 9 years. I'll give each of you $1000 if you contact the banks lawyers and ask them to contact the bank and get them to agree to do a short sale to me. This puts money in your pocket and avoids the auction. They have been gone over a year, so it is obvious they have no intention of paying the back debt to keep the house.
The REO man said, don't write the lawyer's call them and ask for the status.

You can go to your property tax office and find out if the taxes are paid up and who paid them. Around here all you do is go say, I am interested in buying this house and need to verify the taxes are paid. They hand me a copy of the receipt and it shows who paid the taxes last and when. If that house near you is in foreclosure and has been vacant since 2009 then somebody paid the 2009 taxes. It is probably some bank. The receipt will give you the name of the bank. You can then go to your local mortgage agent for that bank and inquire.

Your county website may have a GIS search and it will tell you who the owners are, the last time it sold, and at what price.

Are you wanting new neighbors?
You want them to be the new owner or renters?
Or do you want to try to buy this house thru a short sale or your county foreclosure auctions?

What about the windows? Can you see in all the windows? When it is near auction time they will close the blinds, etc. so no one can see inside. They don't allow inspections until after you bid and buy it, so they do not want you to know the condition inside. It's a gamble to buy a foreclosure because they prevent you from looking inside, etc.

Luckily, on mine, I tried to go in. I discovered that the door was not all the way closed. I opened it and looked around. Nice house other than the personal property left by the owners, clothes, trash, etc.
I got a bar stool and put it in the middle of the room. I wrote a note saying I was interested in buying the house. I put it in an envelope and wrote "to owner". I went back a few weeks later and looked in the window. Bar stool moved. I saw my envelope, address side down, unopened, on the floor. Whoever went in did not open it. Someone is keeping the grass cut and since then, the house has been locked.
I may be one of few that know the condition of the house if it is auctioned.
It last sold for $79,000 so it may be over my price range, either at the auction, or if the bank buys it at the auction, and then lists it. I go to the auctions and one month there were 54 auctions. 52 were bought buy the banks for various prices, many for $2500. Once that happens the foreclosing bank owns it, and will fix it up and list it, or maybe sell as is.

I saw one and the debt owed was 59,000. I went to the court and looked at the file and could not determine where that extra debt came from, when the previous sale price was 25,000. I avoided it. It was sold to the bank at the auction, they were the high bidder for 29,000. A few weeks later it was listed for 31,000. So, if you had gone to the auction and thought you were getting a deal by bidding 41,000 you weren't. My lawyer told me, and he bids on behalf of the banks at close to 80% of the auctions, once the bidding starts the debt means zero. It is the amount the bank hopes to get from it. So, the bank was forced to bid 29,000 for it as there must have been other bidders. The banks always bid first and they bid low because their fee is 1%. My lawyer must have bid 2500 and someone ran it up and he bid 29,000 and the other bidders stopped.
Well, it never seemed to sell for 31,000. The bank was taking a loss as it was, the debt owed was $59,000. A few weeks later the price got lowered from 31,000 to 25,000. 2-3 weeks later it sold. The bank got roughly 25,000 and they paid 29,000 for it, so they lost 4000 there plus the 59,000 that was owed them. A close look as to why it did not sell. It was a rare 1 bedroom. So, with a sale price of 25,000, anyone who tried to buy it at the auction would be a loser. I've been told the best thing to do is wait and let the bank buy it and list it. Then you can offer on it, and if accepted, then get an inspection, and closing if everything works and is in decent shape.

[middle-aged mom]

Originally Posted by naeem5

Luckily, on mine, I tried to go in. I discovered that the door was not all the way closed. I opened it and looked around. Nice house other than the personal property left by the owners, clothes, trash, etc.

Squatting in abandoned property is increaingly common in some areas.
You are very fortunate that neighbors did not call the police and have you arrested at a minimum, for tresspessing.

As an aside, more than likely, it's neighbors who are keeping the grass mowed. They too are also trespessing for different reasons.

[texdav]

Trespassing is a charge. It has to have a complaining party with control over the property such as a owner.Entering a home is one way to get such a charge tho if they can find a owner who signs a compliant. Neighbor is good enouhg unless he ahs paperwrok saying he has control signed by ownerto arest tehn oowner has to sign the compliant.