ForeclosureExposure Don't Know The Rules & Lose Money
ForeclosureExposure-the negative kind!
I receive a lot of calls from people after they receive their Certificate of Title from the Clerk of Courts, as they were the winning bidder at a foreclosure auction. Many auction winners are unaware of superior liens, mortgages and the negative effect they can have, if you don't know the rules.
I was scanning the completed online county foreclosure auctions in Indian River County and found this beautiful example and it didn't take long as there are many across the state.
See It For Yourself? Here's How!
Google,"Indian River County Clerk Of Courts"
Once on Clerk's Page locate the Foreclosure List Button & Click
Locate The Online Auctions Link & Click
Login to site (FYI-nice feature you can toggle from one counties auction site to another counties without having to leave the host site)
Locate Quick Search & Click
Auction Type "foreclosure"
Sale Date "2/1/2011 to 2/1/2011"
"Run Report"
See number two on the returned list? Excellent deal right?
Assessed at $167k foreclosed for $4366 Winning Bid Of $4900.
If you click on the case number the returned page will give you the Zillow estimate of value $175k-great. Maps/Aerials-looking fantastic. Looking at the final judgment-foreclosing entity is HOA. All mortgages and liens recorded prior to the foreclosing entity will be superior in this scenario.
While looking at the final judgment, highlight & copy the "Legal" then look for the "return to search" button, click it. On the returned page find "legal search", click it. Past legal into box and select "contains" in the comments field. Click on "Search Records"
I see multiple mortgages without satisfactions to the tune of $261k. On further research I did find that the 30k mortgage was satisfied leaving $231k in mortgages to contend with and all were recoded prior to the lien which foreclosed.
Not so great after all-paid $4900, $231k in outstanding mortgages, marketing and closing costs when selling property of around 8.5% of sale price (estimate $14k), carrying costs of $2k, market value of property $160k = loss of money.
In order for this property to break even the outstanding loan amount would have to be less than $139k. With there being multiple mortgages and 2 of them being a few years old little will have reduced from the principal. Getting the lenders to accept a 40% reduction in principal on the loans to release them, well you get the picture.
In the end, I'm sure a guru out there will put this home in their "look at what you can buy for less than $5k at a foreclosure auction" infomercial.
