Can an Auction be stopped?

Question

How can I stop a property from being auctioned, then submit a short sale package to the bank? If I could, how many days from the action date must this take place? I know I can buy a property cash within 5 days from the sale date but if the property is underwater how can I help the owner if they already have a sale date. Thank you.

P.s. The property is in Los Angeles County.

Tom Mole · Answer

@Yetzira Anselmo, it is possible to stop a foreclosure, even when the auction is eminent. It can be tricky, however, the closer to the auction you get. A short sale is unlikely when the date gets close.

How likely is the property to be bid on at the auction? Is there equity in the property? Are there any other liens on the property? If the bank can get more at auction and have come this far, it seems unlikely they'll entertain a short sale. What is the published bid and what were you offering on the short sale?

If there are junior liens and no one bids at the auction, you may be able to get an even better price from the bank AFTER the auction. There are just too many maybe's to cover in this post. Send me a private message with a few more details. I'd like to help. I know someone you should talk to that can help, if anyone can.

Happy Holidays!

Bill Gulley · Answer

No, you can't stop it.

Why would you think the lender would stop it, eat the costs of the foreclosure and agree to eat more in a short sale when they might sell it? How do they know a bid wouldn't be higher than your short sale offer? If they get it back, can't they still sell it to you....or anyone else? They may think they will get a better price exposing the property in the open market instead of accepting a private short sale. :)

Morry Eghbal · Answer

You are saying "I want to stop the trustee sale so I can present a short sale offer. And the sale is in 5 days, right?"

Obviously you don't want to pay the full value for the property otherwise you could pay the loan off.

Even if the bank agrees to go ahead with the sale, short sale does not take just a couple of weeks.

As for the question of how to stop the sale.......""""I have seen...but I don't recommend neither would advise...."People have filed a BK application and that stopped the sale for one- two -- three months"...have the seller talk to an attorney.

Very difficult.

Ron Drake · Answer

if they decide to file bankruptcy prior to the sale, it will be postponed.

The lender will then seek a relief from stay which will allow the auction to continue. It is a double edged sword though, because once the BK is filed the lender won't usually discuss the short sale without attorney intervention in Bankruptcy Court.  Attorneys cost money.

Someone, anyone can go file a simple petition for around $250

Karen Rittenhouse · Answer

I believe the only way you could hope to stop a foreclosure is to get a hold of the bank and pay what they want in cash before it happens.

Please let us know what happens!

Jon Holdman · Answer

Do you have a contact for the trustee that's doing the sale?  If so, call them and find out what the timeline is.  Here in CO the sale can be stopped very late in the process.  Many properties that appear on the list that gets issued about 44 hours before the sale get withdrawn before the sale.  IDK the timeline in CA.

But its up to the bank to withdraw the sale.  Probably best to have the owners contact the bank.  They should have a stack of paperwork from the bank and somewhere in that is a contact person.  Start there.  I will say, however, that if the owners have done nothing for the months and months leading up to this point the bank may not be very interested in doing a short sale at this point.

There are any number of reasons a bank might foreclose vs. a short sale.  Someone might pay them what they want at the auction.  There may be junior liens that would have to be paid off to do a short but will be wiped out by a foreclosure.  Or the bank may just be far enough down the foreclosure road that they don't want to stop it, futz around with a short sale for a few months, then have to restart it.

Bill Gulley · Answer

Each state has its own non-judicial foreclosure laws, if they don't require a judicial process. Rights of redemption vary. Going this route can mean posting a bond for the balance due, or escrowing payments in arrears or covering expenses and doing so within a time limit prior to sale. Usually, if a borrower can meet these requirements, they wouldn't be in that situation.

As to a short sale, I doubt any state would be telling a bank what % of the amount owing would have to be accepted forcing a sale, it's up to the lender to accept the loan payoff. Some common sense applies, 5% less, the lender would be nuts not to accept that if it were underwater, 20 or 30% less, they don't have to go there. I can see where a lender might require 2 appraisals if there were some "cram down" provision.

Most likely your SS specialist is blowing smoke, they may have succeeded once, now they claim they can do it. Or, maybe they are just flat lying, I have no idea.

If it's your property, and someone is approaching you with some stop foreclosure method, I suggest you call your attorney or your local prosecutor and let them see the sales pitch.

If it's a Realtor, you might check with the Broker of the firm to ask for a better explanation of what the agent might be proposing.  :)

Yetzira Anselmo · Answer

We spoke to different short sale specialist and they said that they can stop a notice of trustee sale 2 days before the auction date. Why would they say that? From their point of view banks are not in the business of owning homes. The banks just want the bad notes off their books even at a loss if need be.

Mary B. · Answer

If its to the point of going to auction there is no stopping it, unfortunately. You will have to place your bid like everyone else and hope for the best.

Kudos,

Mary

P.S. Welcome to BP and happy holidays.

Can an Auction be stopped?

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