Attorney Rejected Bid After Awarding Property To Me!
The banks (MGC Mortgage aka LPP Mortgage) attorney held a foreclosure sale on a property where there were 3 people attending, including myself. I was talking to another investor about the market waiting for the attorney. When the attorney started we stopped and waited for the attorney to finish reading the Notice of Sale. He started the bidding at $41,500 for the bank. I bid $42k and showed him my Cashiers check in the amount of $85k as I was prepared for another sale(which was cancelled). He ACCEPTED my bid.
He then asked for other bids but no one else bid. He then AWARDED the property to me. Afterwards he stated that he was going to REJECT my bid due to seeing us talk when he was arriving, saying we were in COLLUSION and that he was only going to accept the banks bid, therefore the bank was awarded the property. Of course I argued with him and he stated I can have a judge decide...Jerk!
Well I have an attorney checking into this so well see. Has anyone ever gone through this?
Jeff
I do not know GU laws. If this occurred in NC, the auction crier would be absolutely correct in throwing out all bids and rescheduling the sale. Yes, where I invest I have seen this. I removed the names and dates but the idea is similar in most juristictions.
"By Consent, the Commission revoked the broker license of xxxx effective xx xx, xxxx. The Commission found that xxxx and other respondents were accused by the State of North Carolina of entering into agreements with bidders in foreclosures and judicial sales of real estate, which had the effect of suppressing the prices obtained in those sales; that in each case the court found a factual basis for the State’s allegations; that in each case one or more of the respondents consented to the imposition of an injunction preventing future conduct in violation of the law; and that xxxx entered into an agreement with the Attorney General’s office to pay in excess of $229,999 in compensatory damages and restitution to the State."
I rarely engage in small talk with other competing bidders prior to an auction. You dont want them to know your position or how high u may go.
I can understand this rejection if only 3 bidders. He must assume you were discussing the property. Doesnt sound like you were though, Sorry to hear that.
As I understand it, CA has two routes to foreclosure. The trustee sale is a power of sale foreclosure that does not need a court order to execute the foreclosure. Trustee sales are commonly held for non-recourse loans in CA for which deficiency judgments are not permitted.
The second route is the judicial foreclosure, the courthouse sale, which you may be calling the sheriff sale and is done when the loan is with recourse and does allow the lender to seek a deficiency judgment.
FL foreclosure procedures probably do not parallel CA and a direct comparison would be apples to oranges.
[ Edited by NewKidInTown3 on Date 09/08/2009 ]
In FL Foreclosure auction are Judicial Like Bargain says but as long as the First Position Mortgage is foreclosing and all junior Liens (2nd Mtg, HOA etc) have been served they are wiped out (foreclosed out) at the Auction.
Why are junior positions served?, so as a junior Lien holder you are notified that your position is about to be wiped out and you can come bid if you want to protect your position, rarely do.
But there are many pitfalls, and attorneys do not always handle the case correctly
FL has no right of redemption, the best part
Read a foreclosure case complaint and the final judgment to get a feel for it.