Anyone Bought a Contract through Orange County Foreclosure Process?

[JHank44]

I was curious if anyone has bid and won on a foreclosed through the orange county foreclosure process? I found a number of listings up for auction that you can bid on through https://www.myorangeclerk.realforeclose.com/index.cfm

There are 3 BLT, 7 AKV, and 5 SSR up for auction in next couple months.

It looks like most of the time Disney wins but it isn't clear at what price they are buying the contracts (or the specifics of the contract besides points - i.e. is it stripped). Does anyone know how to view the price that Disney gets these contracts? How do you view more specific details of the contract?

The main risk is the OCC doesn't guarantee the contracts are free of additional liens but it appears that the grantor is only Palm Financial so I would assume there would not be any other liens.

 

[z28wiz]

I've bought two DVC properties through a Bankruptcy auction which is close. It took a while because the trustee and the Judge have to sign off on it. It took about 95 days to close completely. You would probably be liable for any liens and past dues, similar to the bankruptcy sale. You would have to do some digging through court records to see what each person paid for the sales.

 

[BillPA]

I assume you still need to go through DVD's ROFR. So if you get a really low ball number, DVD will grab it.

 

[JHank44]

I did some more research and it looks like it closes essentially immediately (you have to wire the funds by the next day). You are competitively bidding against DVD so there is no ROFR from what I can tell. Their max bid is their ROFR (I'd assume). It looks like DVD gets these contracts pretty cheaply most of the time. When a third-party wins, it appears to slightly cheaper than resale market but not enough to warrant the additional lien risk & uncertainty around points. As an example, DVD bought a number of BLT for < $50 a point but when third-party won they paid around ~$90/point.

I was initially confused about where to find the price but if you just go to auction date on the auction calendar you can see what it went for. The assignment document on OCC does not contain the price.

I found this article helpful.
http://www.dvcnews.com/index.php/ot...ying-dvc-deeds-at-public-foreclosure-auctions

 

[ScubaCat]

I assume you still need to go through DVD's ROFR. So if you get a really low ball number, DVD will grab it.

ROFR does not apply to foreclosure sales.

It looks like DVD gets these contracts pretty cheaply most of the time. When a third-party wins, it appears to slightly cheaper than resale market but not enough to warrant the additional lien risk & uncertainty around points. As an example, DVD bought a number of BLT for < $50 a point but when third-party won they paid around ~$90/point.

Right, that's the big issue. It can be difficult to find and determine the status of all outstanding liens. And, I'd bid on them as if they were stripped, because DVD obviously would not have any incentive to reveal how many current points are available in the contract.

 

[kniquy]

So I was just curious as to these foreclosures in general. When it lists the "final judgment amount" in the listings -is that what the owner of the property actually owes on the property? or the amount the the auction winner would be liable for.

 

[JHank44]

Final Judgement Amount is the amount the current owner owes on the property. The bidder does not have to pay that amount, only the amount of their bid plus various closing fees. I think they discuss that in the FAQ.

 

[z28wiz]

You sure about that? I don't think that's correct. Who would pay the past dues and so on. Wouldn't the buyer be liable for that? Along with the judgment amount since that is the reason for the foreclosure. I know in property auctions in my state it works that way.

Final Judgement Amount is the amount the current owner owes on the property. The bidder does not have to pay that amount, only the amount of their bid plus various closing fees. I think they discuss that in the FAQ.

 

[z28wiz]

Does the foreclosure or tax deed sale erase all other liens on the property?

No! There may still be other encumbrances (judgments, priority mortgages, taxes, or liens) that survive the sale. The winning bidder takes title to the property subject to all defects, liens, encumbrances, and matters of which he/she has or could obtain knowledge. It is the bidder's responsibility to perform all research regarding the property, including the value, title defects, liens, mortgages, or other encumbrances. The Clerk's Office does not guarantee a clear title and is not responsible for any encumbrances on the property purchased at auction.

The laws regarding foreclosures are extremely complicated. It is recommended that all bidders perform a title search and consult an attorney prior to placing a bid.

 

[JHank44]

You sure about that? I don't think that's correct. Who would pay the past dues and so on. Wouldn't the buyer be liable for that? Along with the judgment amount since that is the reason for the foreclosure. I know in property auctions in my state it works that way.

I am by no means an expert but my understanding is that the Final Judgement Amount has no bearing on the price. You do not bid on a property and take on the judgement of the original owner and the auction price. You are liable from anything after the date of judgement (i.e. dues) but not the judgment amount. The court uses the proceeds from the auction to settle the judgement amount (however much money the lien holder will get back).

You are correct the title may not be clean as their may be other lien holders besides Palm Financial. I think that risk would be relatively small because I don't think many would take a subordinate lien on a timeshare property. That being said, given where DVD (the Plaintiff) puts their max bid it probably isn't worth the risk.

 

[JHank44]

I looked at all BLT contracts (where I own and interested in adding) that were judged foreclosed this year and came up with the below data. Effectively, DVD bids at the level of what I assume would be there ROFR. For BLT, that appears to be around $95/point... not worth the risk so just better to pay 10-15% more for a clean title of something you know what you are getting.


Here are all the transactions:

 

[Matty B13]

I looked at all BLT contracts (where I own and interested in adding) that were judged foreclosed this year and came up with the below data. Effectively, DVD bids at the level of what I assume would be there ROFR. For BLT, that appears to be around $95/point... not worth the risk so just better to pay 10-15% more for a clean title of something you know what you are getting.
View attachment 194975

Here are all the transactions:
View attachment 194976

Wow, that's a lot of foreclosures!

 

[wdrl]

I've done a lot of research on DVC foreclosure activity and I agree much with what @JHank44 has posted on this thread. Here are a few things I would add on the subject of bidding on DVC foreclosures:

There are two types of DVC foreclosures: Judicial foreclosures that are processed by the 9th Circuit Court; and non-judicial Trustee Foreclosures, which are processed by Baker & Hostetler, a law firm that serves as the Trustee for DVC. In substance, there should be no difference between the two types of foreclosures. However, its very easy for a third party to participate in a Judicial Foreclosure since virtually the entire process is done online. Trustee foreclosures are open to the public but (unless things have changed in the past few months) bidders must attend the auction that is held in the offices of Baker & Hostetler in Orlando.

Here is an article about the Trustee Foreclosure process: http://dvcnews.com/index.php/dvc-pr...ypassing-judicial-system-on-some-foreclosures

I interviewed a DVC Member who participated in many Judicial Foreclosure auctions and was the winning bidder on one foreclosed deed. Her experiences might serve as a helpful guide to anyone interested in bidding on a foreclosed deed. Here is a link to the interview: http://dvcnews.com/index.php/dvc-pr...ing-a-dvc-deed-via-public-foreclosure-auction

 

[JHank44]

Here is an article about the Trustee Foreclosure process: http://dvcnews.com/index.php/dvc-pr...ypassing-judicial-system-on-some-foreclosures

I interviewed a DVC Member who participated in many Judicial Foreclosure auctions and was the winning bidder on one foreclosed deed. Her experiences might serve as a helpful guide to anyone interested in bidding on a foreclosed deed. Here is a link to the interview: http://dvcnews.com/index.php/dvc-pr...ing-a-dvc-deed-via-public-foreclosure-auction

Thanks for the information! As I said before, it appears you aren't saving any money buying foreclosed properties. You are just getting the property at the ROFR rate. So from that aspect, it can give a sense of where the ROFR level for a resort. It looks like Disney moved to Trustee Foreclosure to get non-competitive auction - makes sense for them. If you want to make Disney pay more for properties go with foreclosure but besides that the resale market is probably the way to go.

 

[kniquy]

I was just looking at some of the upcoming auctions. What i am confused about is that there are a number of defendants listed for each auction -- that couldn't possibly be the number of people listed on the deeds - correct?

Never mind on this comment - It looks like cases are batch listed with all the names for the various contracts that Palm Financial has cases with. I found the OCC documents which list each property and the owners for those said properties

 

[kniquy]

This is an example of what i searched on the OCC for a particular contract that will be going up for auction soon:

Unpaid Principal balance of loan $12,029.01
Accrued Loan Interest as of September 7,2016 2,992.85
Delinquent Assessments paid by Developer pursuant the Mortgage, including accrued interest 925.12
Loan Late Charges 239.58
Administrative Fes(Due Under Note) 50.00
Title Search Fee 35.00
Attorneys'Fees 645.00
Non-Sufficient Funds 20.00
Court Costs 155.42
TOTAL DUE AS OF September 7,2016: $17,091.98

Is there anything, maybe aside from the court costs, that they would expect the winning bidder to pay on this auction?