All Forum Posts by: Jim Wineinger

• Any lien for installments of taxes and special assessments, which installments will become payable upon the secured roll after the time of the sale.

• The lien for taxes or assessments or other rights of any taxing agency that does not consent to the sale under this chapter.

• Liens for special assessments levied upon the property conveyed which were, at the time of the sale, not included in the amount necessary to redeem the tax-defaulted property.

All the above that you noted in your original post are examples of governmental taxing authorities that have tax liens redcorded against the property in question.

If you are at a county tax sale and the property is within a city limits there may be city property taxes that are not included in the county tax sale. Then there may be taxes for trash collection if the trash company is set up as an governmental unit. Same thing with some utility companies.

The State can put a lien against the property for their taxes owed. Any lien from any governmental agency may remain and therefore the tax deed is considered "clouded" even if it is "free and clear". This is why it is often hard to get "title insurance" necessary to build anything or even sell the property for XXX number of years after purchasing the property.

You will notice that even your reply you answered you own question to the mortgage liens.

Quote [ Pursuant to Section 3712 of the Revenue and Taxation Code, the tax deed conveys title to the purchaser free of all encumbrances of any kind existing before the sale, except: ] end quote

free of all encumbrances of any kind before the sale, except:

What follows, the exceptions, do not list a mortgage lien as an exception so they are cancelled as part of the sale.

Basically what is not cancelled is any lien from any governmental taxing authority.

As far as the IRS redeeming a property, this would only be done when their lein is considered in a junior position to the other liens. And when they are going to do this the property usually does not make it to the tax sales as they "conficate" the property and sell it themselves for what is owed.

I would think that they will just sit back, knowing that you can not sell that property or even get a loan against that property without satisfying their lien as it will be discovered in any title search that is done.

I hope that the information that I have given you proves accurate in your situation. I too am suprised that others have not piped in here. I know they are here, but they must not want to give away their secrects at this time or they feel there is nothing to add to what I have said.

I would note who are the ones doing the actual selling (which recieve no opening bids) and talk to those main players instead of talking to those that you have made not of that are purchasing the properties. I am sure that those who are doing the selling will appreciate more than one avenue of compection for their properties. This may take some time but should be well worth it as you have noticed. And they just might be willing to tell others who are doing the selling that you may be interested in their properties so be sure to tell them to refer others to you as well. This is "marketing yourself". But you must be sure to be ready to move on things or you will get the reputation of someone who can not complete what you start.

I believe the "auctioneer" will attempt to get the full amount owed to be bid by the investors as the opening bid, but this by no means is what will happen, especially if the defaulted loan is "upside down".

A lot of times the lienholder will make the first bid which is to represent the amount that he will not take less than. So an investor would then have to bid more than that amount to get the property. Some auctions are referred to as an "absolute" auction meaning that the property will be sold at whatever price they can get for it and they often to start at 0 but do go up rapidly as the investors are quaranteed that whatever they bid will be accepted absolutely, even if it is $1.

Each auction is a little bit different depending on who is conducting the auction as they control the rules subject to any clauses in the defaulted lien.

As I said before, I have not attended any of these type auctions but am responding to what I have seen in these "trust deed" clauses and "mortgage" clauses.

I have and do attend tax sale auctions. And that is exactly what the county does. The opening bid by the county is the amount of the taxes, interest, fees, and court costs. If you want it you must bid higher or the county buys the property and may then at a later date conduct a special sale where they will consider lower bids.

Interesting!! But with the banks being charged with bending over backwards to help those who are about to be foreclosed upon by the legislation that allowed their bailout (banks) this can only serve to slow down the inevitable end.

This also slows down the number of reported foreclosures for the time being causing a lot of people to believe that the bottom is nearing. While this may be the case it has only slowed our decent so that we do not crash on the ground when we do hit it. It does nothing with the homeowners ability to repay the loan which would keep them out of the impending foreclosure. Especially if the economic downturn causes them to loose their job(s).

But I really do hope that they are right as the sooner the economy recovers the sooner I can gain from the properties that I have been able to purchase recently.

Anyone out there have any helium that we can inject into the housing market???

TIM, here is a reprint of the actual discussion log of the law that was to be passed as far as I coul tell for what you were asking for. Happy reading

Secretary’s authority as investor to encourage the servicers of the underlying mortgages, using net present value analysis, to take advantage of the Hope for Home
owners Program under section 257 of the National Housing Act or other available programs to minimize foreclosures.

(c) CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS.—For residential mortgages underlying
troubled assets purchased under this Act, the Secretary shall request loan servicers servicing the mortgage loans
to avoid preventable foreclosures, to the greatest extent possible, to the extent that the Secretary, as an investor, has discretion to do so under existing investment contracts. Upon any request arising under existing investment contracts, the Secretary shall consent, where appropriate, to reasonable requests for loss mitigation measures, including term extensions, rate reductions, principal write downs, increases in the proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications.

SEC. 26. DEFINITIONS.
For purposes of this Act, the following definitions shall apply:
(1) FINANCIAL INSTITUTION.—The term ‘‘financial institutions’’ means any institution including, but not limited to, banks, savings associations, credit unions, broker-dealers, and insurance companies organized and regulated under the laws of the United States or any State, territory, or possession
of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Marianas Islands, Guam, American Samoa, or the United States Virgin Islands, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.

(2) SECRETARY.
The term ‘‘Secretary’’ means the Secretary of the Treasury.

(3) TROUBLED ASSETS.
The term ‘‘troubled assets’’ means residential or commercial mortgages
and any securities, obligations, or other instruments that are based on or related to such mortgages, that
in each case was originated or issued on or before September 17, 2008, the purchase of which the Secretary determines promotes financial market stability; and, upon the determination of the Secretary in consultation with the Chairman of the Board of Governors of the Federal Reserve, any other financial instrument, the purchase of which the Secretary determines necessary to promote financial market
stability.

Come on everyone, I know that I am not the most knowledgeable on this subject to help Shari out here. I can only tell her what I understand, which may not be totally correct. Please correct any of my incorrect statements and help Shari out even further than I can.

Just guessing here, but since you list the lien amounts you may not understaqnd the bidding process.

The bidding process has nothing to due with what is owed on a property. That amount is not the opening bid. That is the amount that the trustee wishes to get for their "client". The opening bid could be as low as $1.00. and go up from there. This is up to the investors.

The trustee conducting the auction may suggest an opening bid of 50K and if no one is willing to bid that amount he may drop that to 40K or 30K until he can get the bidding going.

After the bidding has started it just goes up and up until no one is willing to bid any higher. It is then up to the seller(trustee) to accept or reject the winning (highest) bid. They will reject any winning bid that their client feels is too low. This is often called a reserve price on many of the bidding sites. Which only means that the seller reserves the right to keep the property himself if no one is willing to meet the price that he wants.

It is then considered as him buying the property himself and this is how a property actually becomes owned by a bank (REO) because the bank thinks they can sell it on the open market for more than what the auction was willing to pay for it.

There was something like that on the news a while back, but do not know if it was just being proposed or was just a "guideline". But instead of saddeling the banks with these there was a plan for the government to step in and "purchase" those non performing loans so that the banks would have more money available to them for future loans.

Maybe that means that there will be more properties available at "governmental auctions"?

shari, something does not seem correct, as you suspect. Fraud? I do not know. But from what I have seen for trustee sales the highest bidder wins that and must somehow pay that amount to the trustee. If the trustee is somehow accepting less than the bid something is wrong. Execpt when the highest bidder can not come up with the required amount, it then falls to the next highest bidder and the highest bidder can be charged accordingly!

But I definately would talk to the trustee and find out if what you suggest can be arranged. Some of those sales require XXX amount upfront and the remainder within XXX days.

There are those here who have spoken of "pre-foreclosure" and another term which I think was "pre-bid" (not sure of that) where there is less competition in the bidding process. I hope they will chime in for you!!!

Good luck.