Forclosure question- how things work and speculations

[mistysue]

My neighbors had their house foreclosed on in October, it got a for sale sign yesterday and my sister is house shopping so I wondered how much it would be listed for. I searched for it online and it tells me that it sold last spring for $153K. I can then look at the tax information at the township and the spring sale and fall foreclosure are the same dollar amount. Do refinances sometimes come up as home sales in public record searches? The same people had been living there.

The last people's parents bought the house in 2003 and sold it to the couple in 2007 for $146K, then the foreclosure amount on the township lists from October say that it foreclosed for the $153K amount- the same as what the "sale" from last spring is listed as.

I'm just being nosy but it got me wondering- do you think they refinanced it for $7K more than their purchase to include other debts and then let it go?
-OR-
Is it more likely that the sale from last year is just listed as the wrong date? (so the Oct foreclosure is just listed as April as a random error)
-OR-
When you stop making payments, would there have been enough fines to undo 2 years of payments and add $7,000 to the debt?

I thought it was odd that they foreclosed at all because they went from being full time students with two children to having good jobs about a year before the daughter told me they were moving. I know it's none of my business, but I find it fascinating how they bought a new Cadaillac, boat and huge truck- then they were house shopping. Their 10 year old said they found the perfect home- much bigger with sidewalks and closer to grandparents... then a week later they moved out and the house got foreclosed on? It makes me wonder if grandma "bought" them a new house so they could resell it to them again when the foreclosure gets off their credit. I know they were on public assistance while in school, which is what sparked the thought in my mind. Not that I think everybody on public assistance would do these sorts of things, but they seemed like the type who would. I think the first house was out of their names during school so it wouldn't be an asset.

 

[mickeymaker2003]

If their down payment was small (or non-existant) there would easily be enough accrued interest over a year to add $7,000 to the bill. Our house was a similar amount (we put down 20%) and I think our first payments were only about $150 in principal and $800ish in interest. If no one is paying the interest, it will keep adding up.

 

[SOnotLayuh]

If their down payment was small (or non-existant) there would easily be enough accrued interest over a year to add $7,000 to the bill. Our house was a similar amount (we put down 20%) and I think our first payments were only about $150 in principal and $800ish in interest. If no one is paying the interest, it will keep adding up.

This.

 

[mistysue]

Does it take a year of not paying to get foreclosed on? They would have started the mortgage at 143 in April 2007, foreclosure happened in Oct 2009. I thought it would have been a quicker process. If they could have spent a year not paying then I guess that could work that way.

 

[cglaura]

Also, if they had taxes and insurance escroed, then that would be added to the sale price b/c the mortgage co. would be paying that automatically regardless if monthly payment was made, and since no payment made there was no money in escroe (sp?), so negative balance begins in that account.

Could drag out up to 2 years or more...it depends on the mortgage co, and if they tried a mediator to drag out the process, maybe filed bankruptcy but then never lived up to the agreements. Filing bankruptcy puts an automatic stay on the sale for something like 3 or 4 months (give or take, I'm sure there are exceptions...).

 

[NCRedding]

The opening bid in a foreclosure includes all past due amounts, late fees, interest, unpaid taxes, and insurance. It also includes all the foreclosure costs, which can be things like filing fees, service costs, trustee/attorney fees (can be up to 5% of balance in my state), recording costs, etc. If there are no bidders at the sale, then the bank "buy" the property back at that amount.

It adds up quickly.

 

[ohlas]

The opening bid in a foreclosure includes all past due amounts, late fees, interest, unpaid taxes, and insurance. It also includes all the foreclosure costs, which can be things like filing fees, service costs, trustee/attorney fees (can be up to 5% of balance in my state), recording costs, etc. If there are no bidders at the sale, then the bank "buy" the property back at that amount.

It adds up quickly.

what she said, but you can send them a lower bid, its not like the sticker price at walmarts lol ,,,,, I would do a little lower then the houses are going for the area, banks hate to hold onto houses, they will just sue your old neb. for the difference, or the person that really owed the house...

but if the all mighty government owed house they dont mind holding onto houses for like years and years lol .....

as far as what happend this is what im thinking
grandma bought the house they moved in as a rent to own didnt make payments then, because they where poor students.

got finance because they where vested into the house for a year

didnt make payments because they where to busy buying other things

yes it takes long time to kick someone out of a house/apt 3 months of missed payments so that is 4 months of no payments really till they bank starts forclosure process, yes they call and send you mail, but hey you still got a roof over your head for 4 months for free...then depending on how long it takes the bank to go thru the process then they have to file in court too... thats another 3 months just to file and get a court date,,, now we are up to 7 months, lets say it takes 3 more moneys to get a court hearing now we are up to 10 months, and the judge gives you a leave day of 60 days for that hearing.... prosto 12 months......

 

[minnie1928]

Does it take a year of not paying to get foreclosed on? They would have started the mortgage at 143 in April 2007, foreclosure happened in Oct 2009. I thought it would have been a quicker process. If they could have spent a year not paying then I guess that could work that way.

Oh yeah. There was a house in my neighborhood that was occupied for less than 3 months, then the people moved out. It was about 2.5 YEARS until the foreclosure got to a point where the house was put up for sale. Banks have been swamped with foreclosures so they simply aren't able to keep up with the pace.

 

[Kae]

Most homes that go into Forclosure are Mortgaged to the max value & +.

Kae

 

[mamalle]

one of my neighbor's house has been in foreclosure since 4/08. I check every month on the clerk of court site to see if its finally over but 2 years later-no such thing.. god, they have been living in that house scott free for maybe 3 years is my guess.. They also took out more than what the house sold for like $75,0000 more to be exact. Never have paid their HOA dues since the day they moved in. The great thing here is everything that comes into the courts is scanned and can be viewed to the public online- so I keep track when I start noticing things changing like unmowed lawns, etc.. plus we get served for every foreclosure since hubby is the hoa president since they are not getting their money either..

 

[cats mom]

Does it take a year of not paying to get foreclosed on? They would have started the mortgage at 143 in April 2007, foreclosure happened in Oct 2009. I thought it would have been a quicker process. If they could have spent a year not paying then I guess that could work that way.

Oh easily. I live in one of the boom states. It's crazy to watch what is happening around here.

I've been keeping my eye on one house where the NOD recorded 1/09 with a first scheduled auction date of 5/09. The next scheduled auction date is now 4/10. There have already been 19 postponements. Any bets on whether it actually ends up available on the courthouse steps next month? My money says no.

The banks have crazy accounting procedures that allow them to carry these houses on their books without realizing any loss until they actually short sell, foreclose, whatever.

In the case above the folks bought new from the builder in 1998 for $734,500 Similar houses in that neighborhood are now selling for around 1.5 million. Even with that crazy rate of appreciation, the "owners" owe more than they could sell for. They took out multiple HELOC's and re-fie'd with an ARM. I don't think they should be eligible for any federally backed loan mod programs with their high dollar amounts, but they're still living in the house, so that must be what is happening. I'm sure the bank is not too excited about taking that high $$$ hit on their books, so they're playing extend and pretend any way they can.

 

[Colleen27]

First, foreclosures sometimes show up as multiple entries in sale records, depending on the state's procedure. For example, Michigan is a non-judicial foreclosure state, where the proceedings generally happen via sheriff's sale. So at the date of the actual foreclosure, you have one sale recorded, basically the bank buying back the property for the amount of the debt. Then at the end of the redemption period (generally 6 months) at which point the owners can no longer settle the debt and retain the house, there is another transaction for the same amount recorded. So it looks like two sales in the tax records - one from the owners to the bank and the other from the bank to itself/its REO arm or HUD in the case of FHA insured mortgages.

And yes, foreclosure proceedings can cancel out years of payments and add to the total debt amount. We have friends who went through this. The foreclosure amount, after 3 years of making payments and putting tax returns towards the principle, was almost exactly the original sale amount. Those early payments are mostly interest, so there isn't all that much to offset, and the fees associated with foreclosure can be very high (I've heard 10% of the mortgage balance as a rough estimate).

 

[2005s4]

When a house is foreclosed on the bank does a BPO (broker price opinion) which determines the listing price of the property. If you have any specific questions feel free to PM me. I am an agent that does BPO's and bank foreclosures.

 

[zalansky]

Oh easily. I live in one of the boom states. It's crazy to watch what is happening around here.

I've been keeping my eye on one house where the NOD recorded 1/09 with a first scheduled auction date of 5/09. The next scheduled auction date is now 4/10. There have already been 19 postponements. Any bets on whether it actually ends up available on the courthouse steps next month? My money says no.

The banks have crazy accounting procedures that allow them to carry these houses on their books without realizing any loss until they actually short sell, foreclose, whatever.

In the case above the folks bought new from the builder in 1998 for $734,500 Similar houses in that neighborhood are now selling for around 1.5 million. Even with that crazy rate of appreciation, the "owners" owe more than they could sell for. They took out multiple HELOC's and re-fie'd with an ARM. I don't think they should be eligible for any federally backed loan mod programs with their high dollar amounts, but they're still living in the house, so that must be what is happening. I'm sure the bank is not too excited about taking that high $$$ hit on their books, so they're playing extend and pretend any way they can.

We're in Florida too and have 3 homes on our street that are in foreclosure, were all served sometime in 2008 and are all still living in the homes. It does annoy me to no end. We have one right next door where an older couple left and let their 20 something daughter stay in it - she moved her boyfriend and his 3 pitbulls in and they have friends over constantly and park all over the grass. I can't wait for the day they finally get kicked out, but at this rate, that could be a few more years.

 

[Colleen27]

We're in Florida too and have 3 homes on our street that are in foreclosure, were all served sometime in 2008 and are all still living in the homes. It does annoy me to no end. We have one right next door where an older couple left and let their 20 something daughter stay in it - she moved her boyfriend and his 3 pitbulls in and they have friends over constantly and park all over the grass. I can't wait for the day they finally get kicked out, but at this rate, that could be a few more years.

Be careful what you wish for... The foreclosure issue hit my area hard early on (more unemployment driven than ARM driven), and believe me, people living in homes they will eventually lose is much, MUCH better than having half a dozen vacant homes on the block. For the most part the banks only do the very bare minimum to maintain the properties, so you get things like the front lawn being cut but not the back, stagnant water sitting in undrained pools or water features, overgrown backyards, unshoveled walks (not an issue in FL but bad here in MI), etc. And of course, vacant homes attract loitering teens looking for a place to "hang out" and in some cases, squatters and scrappers that damage the property. Our old block was, for most of last year, about half empty homes and it really does change the entire neighborhood for the worse.

 

[mamalle]

the lawn thing really bothers me to no end.. there is one on my street that is banked owned and Im pretty sure another one is also. The one that Im waiting on for years has god knows how many people living in the house. When they were served the beginning of March for yet another part of the proceeding whoever answered the door refused to write their name so it continues.. I figure once I start to see appliances go out the door its finally reached the end. unbelievable..