Someone Please Explain Sheriff's Sale.........
I am confused about the auction process. Apparently, in AZ, there is a Trustee Sale and a Sheriff's sale. The sheriff's sale appears to be when creditors and HOA's sue you. Hence, my questions...........
A person can have a mortgage outstanding, but for whatever reason, the person does not pay his/her HOA fees (the one that I looked up was $3800 +/-). The HOA can foreclose on the property through the Sheriff's office. From reading the Sheriff's notice, if the property is vacant the redemption period is 30 days. If they are still in the house, the owner has a 6 month redemption period. The mortgage company may bid at the auction up to what is owed on the property and if you bid $1 more then the property is yours. The person with the winning bid gets title and access to the property after the end of redemption period.
What if you purchase the property and the homeowner is still living there? Do you evict after the redemption period? Are you obligated to post a public notice for this if the house is vacant? If the mortgage company does not show up at the auction and you have the winning bid of $4000 on a property that is worth $200,000, what happens the loan? Do you take second position to the first? If you are being sued for $11,000 in credit card bills and that lien goes to sheriff's sale, does the bidder become owner or just an additional lienholder in 2nd, 3rd, 4th or more position? Can someone explain how this whole thing works? If the homeowner comes up with the remedy within the 30 days or 6 months, do you at least get interest on the money that you forked up at auction (I am assuming that you get your money back) similar to tax liens?
Side note: We had a big news story here in a semi-retirement community a couple years back. The lady did not pay her HOA and did not keep up the property (can you say horrible condition?) She was outraged and was on the news every chance she could get. I cannot remember if she had some medical condition. Some generous person paid her back HOA dues AND paid and fixed her code violations.
I can not answer your full question so I will limit myself to the mortgage comment.
As you posted from what you read in the rules...
"The mortgage company may bid at the auction up to what is owed on the property"
This means the lender can bid up to what they are owed and that is how they protect their position. Hence the implied message is that the lender could get wiped out if they do not bid. By bidding they make sure that anyone who bids more is bidding enough to pay them off. If no one out bids them their mortgage agreement or trust deed will allow them to foreclosure (default triggered by the sale).
As I think you understand the rules are state specific at a minimum.
John
[addsig]
OK, that answers part of my many questions. So my understanding is that if you go to these types of auctions, you better have enough monies to pay off the existing mortgage. Or do you think if the mtg is current, the mtg co will be willing to work with you in assuming the mtg? Probably a long shot.
One weird property that I was looking at yesterday: the property appeared to have been foreclosed on by the mtg company. About 2 months later the HOA was foreclosing on the same property for back dues I assume. I did not think THAT was possible. But I guess, the HOA just wants their money. Am I right that whomever won the auction is still stuck with the HOA lien or is the original mtgee on the hook for that debt?
Quote:
On 2004-09-21 18:19, active_re_investor wrote:
I can not answer your full question so I will limit myself to the mortgage comment.
As you posted from what you read in the rules...
"The mortgage company may bid at the auction up to what is owed on the property"
This means the lender can bid up to what they are owed and that is how they protect their position. Hence the implied message is that the lender could get wiped out if they do not bid. By bidding they make sure that anyone who bids more is bidding enough to pay them off. If no one out bids them their mortgage agreement or trust deed will allow them to foreclosure (default triggered by the sale).
As I think you understand the rules are state specific at a minimum.
John
I had no idea that a credit card company could enable anyone to foreclose on real estate. Nowhere in any credit card contract is there any clause that states they can foreclose on real property, unless the credit card (hence a home equity line of credit) was linked/secured against the real estate itself.
There is no differences from state to state on this. Credit cards are considered "unsecured debt". Unless, like i said, that credit card is attached to a HELOC.
The credit card company can apply a lein on the property, but that lein would only insure that the creditor would get their money on down the road when that person refinanced or sold the home. This does not happen all too often. Normally the creditor will obtain a judgement; or sue the debtor for the amount owed. This "judgement" would go on the credit report and stay until it is paid/settled. Even with all of that happening, this still does not insure that the creditor will ever get their money.
As for the rest of your questions, i really have no idea. But i wanted to insure that there was no confusion on the fact that a credit card company cannot issue a foreclosure on any real estate unless it is attached to a HELOC. Thanks!!!! Tim