Foreclosure and distressed property topics

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graphrix_IHB

graphrix_IHB

New member
<p>There has been so many questions on the forum about foreclosures and distressed properties. So I thought it would be best to have this discussion be the central thread for any questions or info on the foreclosure market. </p>

<p>First a quick breakdown of the foreclosure process:</p>

<p>The first stage is NOD notice of default. This happens after a borrower in 90-120 days late. It is a recorded document and public record.</p>

<p>The second stage is NTS notice of trustee sale. This can happens about 30-60 days after the NOD is filed. This is supposed to be a recorded document and public record. However something in this part of the process is messed up right now and I don't know if it is a county problem or a lender problem. You can find these in the newspaper or on a site like <a href="http://www.fidelityasap.com/">www.fidelityasap.com</a>. The notice of sale amount will be the loan balance plus any fees or back interest. </p>

<p>The third stage is the auction where either a person buys the property or the bank takes it back. When the bank has to take it back it becomes REO real estate owned. This happens about 31 days after the NTS is filed however it can get postponed for months and months. The opening bid will typically be the loan balance however it can be more or less depending on the circumstances.</p>

<p>My timeframes are the soonest they can happen but it doen't mean they happen that quickly. It seems that this process has slowed a bit with the increase in volume.</p>

<p>First liens come first so if there is a second lien and if it goes through the auction the second lien is wiped out. Becareful if you see a lien that seems way too low for the property because it could be the second lien. If it is then at the auction you will be bidding on the second lien and not the house. If the owner defaults on the first and it goes through the foreclosure process you are left holding a now wiped out second lien.</p>

<p>Second I will be updating my guestimate of NODs for OC here. For May my guestimate is 996 plus or minus 50.</p>

<p>Third I will post properties that I find interesting in the foreclosure process. By no means will they be a good deal but for whatever reason intresting. For example here are some Irvine properties up for auction today 6/6/07:</p>

<p>11 Solstice 92602 NTS amount $809k opening bid amount $735k.</p>

<p>39 Modesto #115 92602 NTS amount $612k opening bid $602k.</p>

<p>5012 Yearling 92604 NTS amount $385k opening bid ?.</p>

<p>51 Sconset 92620 NTS amount $665k opening bid ?.</p>

<p>I will have an update if these are sold, taken back by the bank, cancelled or postponed later today.</p>

<p>So ask your foreclosure and distressed property questions here. I may or may not have the answer but there are so many knowledgeable people here that I would imagine it can be answered. I am by no means an expert and I hope to learn from this as well.</p>
 
<p>Has anybody here ever thought of starting a REIT or REIT company? It would be interesting to see all this brainpower and work go to a good use.</p>

<p>-bix</p>
 
<p>Updates on the Irvine properties from today 6/6/07:</p>

<p>110 Modesto #115 - the bank took it back for $602k.</p>

<p>51 Sconset - postponed to 6/18/07.</p>

<p>11 Solstice - postponed to 6/20/07.</p>

<p>5012 Yearling - postponed to 9/6/2007. </p>

<p>I forgot one yesterday 2301 Ladrillo Aisle 92606 NTS amount $345k and the bank took it back for $320k.</p>

<p>Properties of interest up for auction on 6/7/07:</p>

<p>11 Greenmoor 92614 NTS amount $407k min bid ?.</p>

<p>77 Alicante Aisle #75 92614 NTS amount $281k min bid ?.</p>

<p>4017 E. Rolling Green 92867 NTS $1.076mil min bid?. This one is interesting since it was bought in 2003 for $989k 100% financing and a victim of a $1mil option arm refi and two HELOCs.</p>

<p>3037 E. Snead Place 92782 NTS $596k min bid ?. This is our friend who owned 174 Vintage before the bank took it back.</p>

<p>680 Catalina St. 92651 NTS $60k min bid ?. This one is funky because the NTS amount doesn't match what is on title but they do have a private loan for $600k. Without a chain of title you could be bidding on a $600k loan that could be wiped out. I am not sure what to make of it.</p>
 
<p>Status of properties of interest up for auction on 6/7/07:</p>

<p>11 Greenmoor 92614 the bank took it back for $374k</p>

<p>77 Alicante Aisle #75 92614 cancelled</p>

<p>4017 E. Rolling Green 92867 postponed to 7/6</p>

<p>3037 E. Snead Place 92782 postponed to 7/6</p>

<p>680 Catalina St. 92651 postponed to 8/7</p>

<p>Properties of interest for 6/8/07:</p>

<p>1011 Bonnie Doone Terrace 92625 Corona Del Mar NTS $717k</p>

<p>59 Nightshade 92603 NTS $536k</p>

<p>527 12th Street 92648 HB NTS $653k. This will be the second home on this street in two weeks if it goes through.</p>
 
<p>Graphix,</p>

<p>Don't you ever sleep? Seriously though, thanks for the info. It doesn't appear as if anyone's buying these properties at auction.... that whole "depreciating asset" thing I guess. </p>

<p>Question: You commented on being careful about seemingly low purchase prices - because they may be the 2nd liens. </p>

<p>1. How would you conduct research to verify that you are bidding on a true 1st lien?</p>

<p>2. Does this mean that the distressed homebuyer is still paying the 1st?</p>

<p>3. Could the low amount be a tax lien / HOA lien? I only ask this, because I've seen some in Palm Springs REO under 10K. I couldn't figure it out ! Thanks.</p>
 
what's a tax lien?





a friend was thinking of buying them, figuring that at worst he gets paid interest on the amount he paid for the lien; at best he gets the whole house. that sounded too good to be true.





he never went through with it, and i don't remember his description of it...any idea what it is?
 
<p>Trooper - I will have plenty of time to sleep when I'm dead. Ok so I was a bit tired this afternoon at work but I just have keep the masses happy with the foreclosures. I especially like the $1mil range because I have been told by the bulls this market will not be effected.</p>

<p>To answer your questions:</p>

<p>1. If you are serious about buying a home at the foreclosure auction you would want a title report/insurance and a chain of title from a title company. If you want to just check it out first you would just get a chain of title from the title company. I think you could figure out through county records but I would rather play catch on the freeway. The way I check is through a service the title companies offer to look up the owners and loans but there is no guarantee that it is accurate. But if they have a second loan in the last year for $50k and the NTS amount is $53K you have a pretty good idea that is what it is. Plus I can get recorded documents with it too. I know that Chicago Title offers this service for "investors" and if you want to be an "investor" I will find the link for you. I warn you a title rep will have to contact you and they need the business.</p>

<p>2. Yes or no. Usually it is yes they are still paying the first. No would mean that it could be two different lenders/banks for the loans and one of them is just a bit behind with all the foreclosure work they have these days.</p>

<p>3. It is possible that it is a HOA default but I would have to look into what position they would come in and how it would work. If they are defaulting on the HOA then the mortgage is usually right behind when it comes to the NOD. A fed or state tax lien would just sit there until they refi'd or sold the place. A property tax lien is a whole different animal and it takes about five years before they would be forced to sell. I don't even think OC has a department for this unless it is probate deal. If you are seeing a REO meaning the bank now owns it for $10k then it could be just land or a place that should be just land out in PS.</p>
 
<p>almon - Some states allow for property tax liens to be sold when they have not been paid. CA is not one of those states. They pay a high interest rate and like you said at least they have a home to fall back on if they have to foreclose. But they are usually really small amounts and in counties and cities that even google earth doesn't recognize. So either you have to buy a bunch which is rare or get lucky with a big one which is even more rare to even make up for the travel expenses. </p>

<p>You should tell your friend to stop watching late night infomercials and post on blogs instead. It could save him/her a lot of money.</p>
 
<p>Status of properties of interest for 6/8/07:</p>

<p>1011 Bonnie Doone Terrace 92625 Corona Del Mar NTS $717k</p>

<p>59 Nightshade 92603 NTS $536k postponed to 6/20</p>

<p>527 12th Street 92648 HB NTS $653k postponed to 6/15 filed BK postponed to 7/9</p>

<p>Does anyone know why a property in foreclosure would be postponed with the reason being "operation of law"?</p>
 
<p><a href="http://blogs.ocregister.com/mortgage/archives/2007/06/foreclosure_sales_on_the_rise_1.html">Matther Padilla</a> over at the Reg was disappointed the times broke a story about the amount of foreclosures for sale. What I was disappointed with was they said only 200 were for sale according to Ziprealty. I don't think Matt will be the comment nazi that Lansner has become but I thought it would add to this topic.</p>

<p>"Funny that only 200 are for sale because public records shows 101 records with a name on title search for HSBC, 100 for Deutsche Bank, 26 for Countrywide, 9 for Accredited, only 5 for New Century because they are under the names that bought their garbage like Deutsche Bank, 102 for US Bank, 9 Novastar, 17 for Chase Bank, 26 for Bear Stearns, 33 for LaSalle Bank and I could keep going on bank names and then move onto MBS name abbreviations but I'd be up all night.</p>

<p>So right there you have 428 more than double what is currently for sale according to the times and zip and I didn't even search for Merrill Lynch, Wells Fargo, Citibank or Morgan Stanley.</p>

<p>To be fair if you search Bear Stearns it will also come up with the name LaSalle Bank. So when I searched LaSalle I really had 52 results but I subtracted the 19 with Bear Stearns name in it."</p>
 
"Does anyone know why a property in foreclosure would be postponed with the reason being "operation of law"?"





I'm pretty sure that's a euphemism for "Before we could foreclose, the debtor filed for bankruptcy."
 
EvaL - Usually when it is postponed because of BK it states that it is BK. That is why I thought is was strange. I looked up the transaction history and it was scary. Two people going off title and back on title loaning each other private money each time and finally cashing out with a real lender. I hope that makes sense. I plan on looking into it some more.
 
<p>Monday and Tuesday didn't have any properties that were that interesting. However Wednesday looks a little better.</p>

<p>489 Morning Canyon Rd. #2 CDM 92625 NTS $662k</p>

<p>95 Fallingstar #55 92614 NTS $103k</p>

<p>5 Lady Palm 92618 NTS $610k opening bid $603K</p>

<p>833 Polaris Dr. 92782 NTS $1.1mil</p>

<p>NODs are up 20% for the first five days of June compared to May. If the pace continues for the rest of the month we will be well over 1000 NODs for the month of June.</p>
 
<p>Maybe someone can help with my NOD education as regards the following property. On foreclosure.com a new NOD just came up today for zip code 92679, Coto de Caza, on a street Palomino, name Peter Tuma. I can't figue out the exact address, and what I find interesting is the auction date listed on foreclosure.com is 6/14/07, tomorrow, even though the NOD is listed as being filed just last week on 6/04/07. Doesn't an NTS have to be filed before an auction date is set?</p>
 
<p>Update on NODs for May per DataQuick <strong>1021</strong> and my guestimate was <strong>996</strong>. I have been saying plus or minus 50 but I have been within 30 for three months now. Do you guys think it is too soon to claim I will be plus or minus 30? </p>

<p>penn1 - I should know the status on 833 Polaris later today.</p>

<p>awgee - You are awesome! Why? Because I think you may have found a perfect example of what I was looking for with the real NOD numbers being under reported. There was a NTS filed 6/4 and another one 6/14 the same day he got a private loan. But he doesn't show up on title because he transfered it to a "family" member. The address is 3 palomino. I will have to do some digging on this and get back to you. Email me if you want to see the wierd title history and ugly private loan.</p>
 
<p>Status for 6/13 auctions:</p>

<p>489 Morning Canyon Rd. #2 CDM 92625 NTS $662k: postponed BK</p>

<p>95 Fallingstar #55 92614 NTS $103k: postponed</p>

<p>5 Lady Palm 92618 NTS $610k opening bid $603K: Bank took it back for $603k</p>

<p>833 Polaris Dr. 92782 NTS $1.1mil: Bank took it back for $945k </p>

<p>6/14 Property</p>

<p>4052 Germainder 92612 NTS $590k</p>
 
<p>4052 Germainder 92612 NTS $590k was postponed to 7/16</p>

<p>Properties for 6/15:</p>

<p>1 Laurel Gate CDC 92679 NTS $1mil</p>

<p>2719 Hilltop Dr NB 92660 NTS $855k but there is second loan at $217k NTS amount.</p>

<p>11500 Allen 92782 NTS $769k</p>

<p>11 Savannah Ln. Ladera 92694 NTS $583k</p>
 
HI graphrix, out of interest can you get more info on 833 Polaris. which bank took it over and what do you think they'll list it at. Do U think they will add 6% to cover their commission, or do u think they understand current market conditions and bail at all cost.
 
<p>Status on properties for 6/15:</p>

<p>1 Laurel Gate CDC 92679 NTS $1mil: Cancelled</p>

<p>2719 Hilltop Dr NB 92660 NTS $855k but there is second loan at $217k NTS amount: Cancelled</p>

<p>11500 Allen 92782 NTS $769k: Postponed to 7/16</p>

<p>11 Savannah Ln. Ladera 92694 NTS $583k: Postponed to 7/13 due to BK</p>

<p>The list I have has 46 properties that were listed for the auction for 6/15. Six properties went back to the bank and one sold. 26382 Mimosa in 92691 had a NTS amount of $440k with the opening bid at $442k and it sold for $570k. I just hope he doesn't become friends with his neighbor at 26422 who paid $682k in October. Old neighbor said "So how much did you end up paying for your place if you don't mind me asking?" New neighbor said "Oh I stole the thing at the foreclosure auction for $570k a $100k under the comps from about six months ago." Old neighbor turning pale white and choking up said "Uh oh you uh gotta deal."</p>
 
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