Buying a foreclosed home in Georgia?

Question

I was looking to try to find information on a foreclosed home going up for auction, speciafically in Walton county. I've contacted the mortgage company who told me what attorney to call, I did but the lady I talked to acted like I was just getting on her nerves. The mortgage co. told me if it does not sell at auction I could then make a bid on it. The attorney's office told me it will sell either to a 3rd party or back to the mortgage co, so I said then I could contact the mortgage company again? Her response was no. After telling me it will sell regardless at auction, to call her company back the day after auction to see if it sold. Seriously I can't be the only one to ever ask these questions, but everyone I talk to does not seem to have a clue?

Answer 1

The reason that the lady was short with you is that the lender CAN'T sell the property because they do not OWN it yet.
Bob buys a house and takes out a loan against the house and then starts making house payments. When Bob fails to make the house payments then the lender "forecloses" on the LOAN, not the house. The lender must file paperwork with the county where the house is in an attempt to recover the money they loaned AGAINST the house. The county will send out a Notice of Default that MUST be published in the public paper, usually the same paper for all legal notices for that county.
The County then will hold a auction on the court house steps and sell the property to the highest bidder. The lender will show up at that auction and bid the amount they are owed for the loan and interest. If you want to buy the house go to the court house steps on that day. If the lender is the highest bidder THAT is when they get "title" to the house and can legally resell it to you. Before the auction all the lender has is a LIEN on the property and NOT title to the property.
Once the lender gets title to the property, they have realtors that they work with who will list the house on MLS, give buyers tours of the house, and prepare paperwork if you want to put in an offer on the house.
Sometimes you can find bargains by going to the courthouse auctions but you also need to research each and every house you want to bid on because there may be OTHER LIENS against the property such as back taxs, sewer and water liens, a second morgage, and lots more. If you buy it AFTER the lender was gotten title to the house then the lender must "cure" or pay off all other liens before they can resell the house to you with a "free and clear title" meaning there are no liens against the property and you do not have to worry about that risk. The BEST person to talk to is the people at your court house who put on these auctions every week. And also talk to te other people who sow up for the auction and let them brag to you about how long they have been doing this and how they qualify houses for purchase.
Court house auctions are NOT selling that many bargains in this market because in most locations, the price owed on the loan is more then the house is currently worth. Lenders are bidding full price of amount owed then sitting on these houses for over a year in some cases. They will then write down the price of the house and sell it at a loss in order to get it off thier books.
Case in point, here in Las Vegas I am buying a 4 bedroom 2 bath house that sold for $300,000.00 in Feb. 2006, the bank repoed for $255,000.00 in Mar 2007, and we opened excrow today for my purchase price of $169,900.00. If I had tried to buy this house on the courthouse steps then I would have had to bid OVER the $255,000.00 price the bank bid. By letting the bank sit on it for 8 months; I am getting it for 56% of what it sold for in 2006.

Answer 2

The general process in such situations is that the lender has a representative at the foreclosure auction to bid on their behalf. If other bids do not rise to the levels of money the lender wants out of the property, they simply buy it back for themselves. Typically, they already have a real estate agency lined up to list such properties, so that the moment the lender takes possession, the home can be put on the market.

Lenders avoid dealing directly with purchasers, for the most part. They have a network of real estate agencies which they use to dispose of REO owned properties. When the agent involved gets an offer, the information from that offer is transposed onto the lender's preferred format of offer, so that they are constantly reading the same form, as opposed to assorted different offer contracts from fifty states.