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I found another home that is up on the Auction block for August 2, 2011. The only notice I've seen recorded with the county was the Acceleration of the mortgage requiring the full balance of the mortgage due and the notice of the auction. Wells Fargo is the mortgagor and US bank is the trustee but the petition came from a Real Estate attorney in Dallas on the mortgage company's behalf. Tax records show Wells Fargo has an escrow account and they are all paid up. The notice does state that they were in default under the Note and Deed of trust and has not been cured. It also states the "AS IS" clause for the auction as usual. According to MLS and the last recorded deed of the trust, the current mortgage started at $130,505.00 on May 1, 2005 for 30 years at a 6% interest rate. I estimate they owe about $118,000 by now.They bought the house for $$147,000 and it appraises today for $180,000. Strange thing is the owner is a licensed Real Estate agent. I pulled this up through public data while checking for her contact information. Tax records indicate her vehicle is a lease but I'm not sure if this tells me anything about her financial situation. The property is in Texas and is not currently on MLS offered for a traditional sale.
My questions is...Is it safe for me to place a bid and try to win the auction?
Should I try to contact the homeowner first to see if she plans on catching up on her mortgage or is it too late for her?
I also looked up the attorney. Should I call him and ask any question?
I drove by the house and the owner was still there and the house looks great.
...They bought the house for $$147,000 and it appraises today for $180,000. Strange thing is the owner is a licensed Real Estate agent. I pulled this up through public data while checking for her contact information. Tax records indicate her vehicle is a lease but I'm not sure if this tells me anything about her financial situation. The property is in Texas and is not currently on MLS offered for a traditional sale.
My questions is...Is it safe for me to place a bid and try to win the auction?
Should I try to contact the homeowner first to see if she plans on catching up on her mortgage or is it too late for her?
I also looked up the attorney. Should I call him and ask any question?
I drove by the house and the owner was still there and the house looks great.
What is the source of the appraisal? If it's the tax valuation, it's not likely to represent current market value. Unless there were substantial improvements to the home, it's hard to believe the value has increased that much since 2005 when most markets have declined. Have you checked recent comparable home sales?
Not sure what you mean by "safe" to bid. Just have a max amount you are willing to bid, and you should be sure to understand all the auction requirements. You will likely need a substantial down payment and cash to close within a day or so.
The attorney may be able to give you some info on the auction status if they are acting as the trustee representative for the sale.
You can try contacting the homeowner, but they may not be in a mood to discuss it with you. They are probably getting a lot of unsolicited calls about it. They should have the option of working out another solution for keeping the home right up until the auction.
I had a Real Estate agent pull comps within the past six months and that was our low end assessment. I also pulled up the previous MLS listing where they bought it back in 2005 and the agents remarks were that it was priced below market for a quick sell. The previous owner may have been in a hurry to sell it. It was on the market for only 14 days. I did a lien search and found a second mortgage for $20,000 from the same lender but there was no assignment for it. Does this mean the second loan will be forgiven if I hold the first lien holder's claim to the deed? I don't want to have to pay a second lien holder's balance when I sell the property.
... I did a lien search and found a second mortgage for $20,000 from the same lender but there was no assignment for it. Does this mean the second loan will be forgiven if I hold the first lien holder's claim to the deed? I don't want to have to pay a second lien holder's balance when I sell the property.
When the home is sold at a foreclosure auction by the 1st lien holder, the 2nd mortgage is wiped out (along with the 1st).
This is true when using a Quit Claim deed at auction, correct?
Not sure what you mean. This has nothing to do with the deed. You really need to get the facts about how the auction is handled in your area. Requirements can vary. In my county, if you win the bid you are given a trustee deed to the property:
As the new owner you are not obligated to the previous owner's mortgages. However, their may be other liens on the property that stay with the home and become your responsibility. You really should do a title search to know if any exist.
get a title report done before you go to bid, make sure a professional explains to you what it says. these banks are foreclosing w/out proper ownership or evidence of ownership, make sure you get title insurance if you do pick up any foreclosures. Dont help these banks create fraud.
As far as I can tell, schedule A still shows the homeowner vested as the current owner. Schedule B pertains to the property survey and schedule C lists all the lien holders. First lien position matches the one the trustee is representing in the notice of sale. No other liens are present. The auction is the step before the bank in first lien takes ownership and turns the property into a REO and then forecloses so this is what I would expect to see on the title commitment. What else should I look out for. I had been working for a Real Estate attorney for a while and my job was to prepare warranty deeds, closing documents and approving HUD-1's so feel free to give me any specifics.
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