When the property goes for foreclosure auction, the information is published in a local paper, but do not expect that it would be in the major newspaper serving the area. It maybe in a newspaper that few people read.
In Daytona we can read it in our biggest daily publication: News-Journal, however they just reprint the list of properties scheduled for foreclosure for the week. You can read it on Sunday (in print or on-line). This information is also can be found on Clerk of the Court website.
They have the list of properties scheduled for foreclosure, and they go by dates. If you go to the court and sit at the computers there, you can find all recorded information and actually read recorded documents.
From your home you can see part of it, but not read the documents themselves. It really takes some time before you start following all that information.
In Volusia County court foreclosure are usually being held Tuesday through Friday. The auction starts at 11AM. Many banks use the services of a representative, who comes to the auction with cases, and then bids for the Plaintiffs. In some cases the Plaintiffs are represented by the attorneys, who come to the auction to bid for their clients.
Usually 10-20 minutes before the auction, a representative for the plaintiffs comes and announces the maximum bids that the Plaintiffs would place for each property. What it means is that even if the judgment amount is, for example, $250,000, the Plaintiff may agree to a lesser amount, and this would be called the maximum bid by the plaintiff.
Sometimes, the plaintiffs instruct the representative not to disclose the amount, so nobody knows what this amount could be.
There are no addresses read at the auction. The clerk of the court reads the names of the Plaintiff and the Defendants. Sometimes they also would read the case number.
Then they would ask “Are there any cash bids?”. The first to respond is the representative of the Lender or the attorney representing the foreclosing party. They would usually say “Plaintiff bids $100”. Then the clerk would ask “Are there any other cash bids? If not, fair sale and fair warning: going once, going twice, going 3 times. Sold to the plaintiff”.
If there are parties interested in bidding, and they know what the maximum bid by the Plaintiff is, they can offer $1 over that maximum bid by the plaintiff, and, if nobody jumps in with higher bid, they can get the property for one dollar over the maximum bid by the plaintiff.
How much do the banks usually ask. Well, usually this amount is higher than the judgment amount. How could that be? The property is not worth the amount of judgments. It is because the Bank does not know for how much they can sell this property. Until the foreclosure auction, they do not know the condition of the property, how much repairs if any is needed, etc. The only choice they have is to foreclose, and then get access, send the REO agent and get the idea of both the cost to prepare it for sale, and also get the idea of what it could be worth.
The judgment is always the amount owed to the Plaintiff plus legal costs and interest. At the time of summary judgment, when the judge approved the sale, the amount is calculated as of the day of the judgment. But then it takes usually about 45 days until they run the ad in the newspaper, so some additional costs incur, and that’s why the maximum bid cold be even higher than the judgment.
Of course, if the mortgage was taken in the peak years for the most money, the judgment may be for way more money than the property can be sold in today’s market, so nobody bids on these properties, and they go back to the Plaintiffs.
However, if the Plaintiff is indicating that they would agree to take less, there may be the situation when it starts making sense for investors to bid on the property. In ensuing bidding the parties increase their offer in increments until only one bidder is left.
When it is declared sold, the highest bidder has to put 5% deposit either in cash or in cashier’s check right at that time. They auctioneer will not go forward with other sales until they get the deposit for the previous sale.. Failure to do so would result in declaring the sale void, and repeating the auction for this property, while the party that was not able to pay 5% deposit will be excluded from bidding.
OK, you put down 5%. Now you wait till the auction is over, get the printout with fees added to the winning bid (the court cost, doc stamps on the Deed). You would have to file the form showing who the owner is, his/her address and phone number.
And by 2 PM the very same day you have to either wire the funds to the court, or bring the Cashier’s check for the full amount of the sale price plus costs minus the deposit.
Then the Certificate of sale will be recorded in the County, and 10 days after recording the Certificate of sale, you can get the Certificate of Title (you might have to prepare the Certificate of Title to the court). That’s when you can enter the property, change the locks and do whatever you need to do.
This, of course, if there are no tenants or foreclosed upon owners. If that’s the case, you would need the Writ of Possession but this is really beyond the scope of today’s discussion.
Next topic is: Who forecloses the properties?
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