All Forum Posts by: Ron S.

That never happens. The servicer of a loan for another bank/lender/servicer does not go and bid on their client's loan at foreclosure sale. Sorry, I've managed foreclosure portfolios in your state and i've not seen it happen in 25 years. I don't believe ANY bank owns the note. The note no longer exists. Some non related entity bought the property at foreclosure sale according to the original poster. it won't be REO because the foreclosing bank sold it to a 3rd party bidder. I don't think anything is unkown here. What's a real estate attorney going to tell you that most of us don't already know?

Sorry, not trying to be rude here but I think you have about five or six Wall Street Journal articles mixed together as your conclusion on what's going on.

Why is it a concern? It won't be REO as the OP stated, the property was purchased by a 3rd party. In my opinion, unless i'm missing something, the redemption period has nothing to do with anything UNLESS the original borrower comes up with cash in the last minute and pays off his/her loan. The expiration of the redemption period should mean nothing to your transaction.

Assuming the kids have documented authority to negotiate the estate, yes, I agree with Rick. If they don't or, if you can't find them, show up at the courthouse steps with cash. If you get through to someone from the estate, chances are they are not going to sell it to you for the default amount but something between that and Fair Market Value. You might even be alerting them to something they aren't currently aware of and by alerting them, you might have just saved their inheritence. Cause them to bring the loan current and sell at full FMV. My strategy would be to say nothing and just spend the next two months getting my cash lined up to bid at sale.

just go to the local courthouse and copy all of the information posted for all of the NOD's filed.

Thank goodness we don't use attorneys on the West Coast for foreclosures. While it happens, I don't see it happenning a lot. I don't see it as being common. Title is issued at the time of the foreclosure commencement (TSG or Trustee Sale Guarantee here on the West Coast) so, any liens show up before the notice of sale (Or judgment for you attorney states) and are dealt with then (Dealt with in the sense that if they are junior, they are noticed that they will be wiped out in foreclosure if they don't pay the senior off).

I'm not thinking you have a thorough grasp on how loans and purchases work but, to your question: No. It can't work. Unless Coldwell Banker became a lender and started portfolio'ing REO's in the last two weeks, they aren't a bank and they don't do FHA loans and assuming everything you said was accurate, NO.

Let's break it down in terms of reality. What you probably meant was, could a bank lend on their own REO? Yes. The could and they do but they don't frequently. Regulators look at that very very closely. In insurance they call it churning and it's not a good thing. Examiners and regulators don't like us giving a loan to a borrower, defaulting the borrower, foreclosing on the borrower, taking the property back from a borrower, and then sell it to another borrower, and do another loan for a new borrower. We do it but it sure better be the most cookie cutter inside the box transaction known to the world because its the first loan that is gonna be audited in an exam.

If it is a bank owned property, there are no liens. Once the bank owns it, they received a trsutee's deed upon sale, free and clear of any liens/encumbrances. Can any liens survive? Yes. Any and all liens in front of the entity that foreclosed survive and tax liens survive until they waive their right to enforce the lien (I foreclosed, they have a lien, they have to pay me off in order to take the property, choose not to, forego their lien on that property).

If it says "Bank owned". The bank owns it. While it's possible, it's not probable that a bank that is still in business and not shut down by the FDIC, took a property subject to existing liens.