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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Lender's choice... Posted by Ward-CA- on March 19, 2004 at 10:01 AM In Reply to: Bids Below Owing Amount at Trustee Sale? posted by Martin on March 18, 2004 at 10:46 PM : I was speaking to someone claiming to be a former REO officer about minimum bids at foreclosure auctions and he said this: : At foreclosure aucitons, lenders are free to accept bids of less than what is owed on the note. : Is this true? If so, is this very common? If it's true, why would the banks repossess the homes and take title to them as REO's? It would seem that they would simply unload the house at the auction for whatever discount they so choose, and then avoid the cost and trouble of repossessing, repairing, listing and selling the home as an REO. : Your thoughts on this are appreciated. : Thanks! : Martin ===================== Martin, Here in CA the lender will come up with a minimum bid amount to start the foreclosure auction. And you're right, the lender can choose beforehand to make the opening bid less than what they're actually owed. But once the lender has determined the amount of the starting bid, then any other bidders will have to bid at least one penny more to continue the bidding. In a Seller's real estate market it's not very common for a lender to start the bidding at an amount less than what they're owed. But by the same token, it's more common for them to use a drop bid or specified bid in a Buyer's market. If a lender perceives that it can net more money by going the REO route then that's what they will do. And if they perceive that starting out with a lower, specified bid at the auction is the route to go then they'll choose that course. So it's the lender's choice as to which way they will go. We bidders have no say in the matter. Hope this helps. Follow Ups: Re: Lender's choice... Martin 12:17 AM, 03/19/04 (2) Savvy competitors routine... Ward-CA- 1:03 AM, 03/20/04 (0) Re: Lender's choice... Sean, N.C. 9:46 PM, 03/19/04 (0) Post a Followup: Name : E-Mail : Subject : Comments: : : I was speaking to someone claiming to be a former REO officer about minimum bids at foreclosure auctions and he said this: : : At foreclosure aucitons, lenders are free to accept bids of less than what is owed on the note. : : Is this true? If so, is this very common? If it's true, why would the banks repossess the homes and take title to them as REO's? It would seem that they would simply unload the house at the auction for whatever discount they so choose, and then avoid the cost and trouble of repossessing, repairing, listing and selling the home as an REO. : : Your thoughts on this are appreciated. : : Thanks! : : Martin : ===================== : Martin, : : Here in CA the lender will come up with a minimum bid amount to start the foreclosure auction. : And you're right, the lender can choose beforehand to make the opening bid less than what they're actually owed. : But once the lender has determined the amount of the starting bid, then any other bidders will have to bid at least one penny more to continue the bidding. : In a Seller's real estate market it's not very common for a lender to start the bidding at an amount less than what they're owed. But by the same token, it's more common for them to use a drop bid or specified bid in a Buyer's market. : If a lender perceives that it can net more money by going the REO route then that's what they will do. And if they perceive that starting out with a lower, specified bid at the auction is the route to go then they'll choose that course. : So it's the lender's choice as to which way they will go. We bidders have no say in the matter. : : Hope this helps. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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