Repurchase house?

[Gabe]

I have a house that I owe about $430k on that is worth about $300k realistically now.

I am about 3 months behind on the mortgage and will be filing CP7 soon.

My neighbor is a good friend of mine and has a wealthy mother that would be willing to loan me that money to buy back the house at auction.

How would I go about doing this? (Not sure I want to do this, but I want to find out what it would take)

Thanks

[dkNY]

If you plan to go the auction route, be prepared to have someone other than yourself, that you trust, bid and bring a down payment. Normally, 10 percent does the trick in most states. Keep in mind that potential buyers are not allowed in the house or on the property at any time you are still allowed to live there. (unless you invite them) This means that unless you are by some freak reason forced to vacate the premises, (almost unheard of in most standard bank owned foreclosures) nobody will know much about the house. This is where you can set the stage for some creative drama to confuse potential bidders and temporarily devalue your nice home. HA!

Things like beware of dog signs all over, clutter, junk, beat up old car on blocks, etc can give the average passerby the impression that the house must be trashed on the inside. HA. Although your neighbors may not appreciate this.

You can even go as far as creating the illusion that the well, heating, A/c, septic or other major thing are in disrepair by leaving tell-tale signs in the yard.

I have lived through this twice and had two houses rescued at the auction block and myself or my tenants never even had to pack a single box. Keep in mind that in most cases the winning bidder only has a set amount of days to come up with the balance of the auction sale price. That deadline is usually about the same or less days then it will take to get you out of the house if you don't win it at the auction and arent too eager to leave. If they cant come up with the money, they lose the deposit. Its very difficult to get a mortgage on a home when the bank does not know the status on the heating, well, septic, etc. Investors want a total steal and wont tie up their cash in houses with a potential hassle unless its a sure thing. Chances are the bank will bid it up the first time to near what is owed. Banks cant afford to lose 100k on every house during this housing slump. If you plan to get it back and clean the slate and have a lower payment, you stand a good chance if you plan to pay a fair price for it. My limited knowledge on this applies to NY and BEFORE the major foreclosure crisis.

Very sorry to hear about your situation and it sounds like your neighbor is a great person for wanting to find you help. Please dont take my juvenile approach and attempt at adding some humor the wrong way. I try to make the most of any bad situation. You came to the right place and other members will have a more mature and educated approach to this, if there is one. Buying your own property at auction is one of the most unsure and suspenseful real estate transactions I know of. Good Luck!

[FreshLikeADaisy]

Chances are the bank will bid it up the first time to near what is owed.

That's what happened to me. Not that I was bidding, mind you; only that they bought it back from themselves for the total amount of the indebtedness.

Banks cant afford to lose 100k on every house during this housing slump. If you plan to get it back and clean the slate and have a lower payment, you stand a good chance if you plan to pay a fair price for it.

Sounds exactly right. And if you're in an area that has a lot of For Sale signs anyway, chances are good you won't have to bother trashing the yard and setting Gramma out on the front porch with a Marlboro dangling from her lip and 12 dogs napping underneath her as she rocks away on her rockin chair with a shotgun acrost her lap....

[BKcrazy]

That's what happened to me. Not that I was bidding, mind you; only that they bought it back from themselves for the total amount of the indebtedness.



Sounds exactly right. And if you're in an area that has a lot of For Sale signs anyway, chances are good you won't have to bother trashing the yard and setting Gramma out on the front porch with a Marlboro dangling from her lip and 12 dogs napping underneath her as she rocks away on her rockin chair with a shotgun acrost her lap....

I just laughed so hard I spit on my monitor. I'm sure you could add free wannabe actors in the area to play lots of parts, like hooker, drug dealer, thugs, etc. Never thought BK would ever make me laugh as much as I have since filing.

[FreshLikeADaisy]

Heh! I just do so love the visuals...

[Minnymouth]

Okay Folks, the visuals were GREAT........

BUT REMEMBER, at auction stands the Trustee...........

THUS...........

1. If your house/land is being auctioned off by the Trustee for your bankruptcy case...YOU CANNOT refuse to let anyone look at you home. Your door must be OPEN to anyone that wants to see/look at it after the auction sign goes up. OTHERWISE, you can be forced to move out before auction.
2. If you try to "trash" or "jeapordize" the auction in any way, the Trustee can stop the auction, throw you out/or have you arrested, and continue his auction another day or same day AFTER he has you removed (arrested) from the premises.

ASK ME HOW I KNOW - BEEN THERE, DONE IT!!!!

Fortunately, the Trustee refused to have me arrested, but he made sure I stepped outside - out of the way and out of voice range!!

When you home is seized by the Court and/or foreclosed and sold by the creditor thru the bankruptcy court BEHIND THE SALE stands the Sheriff, Trustee, or a member of the Federal Bankruptcy System overlooking everything that's going on. The auctioneer works for THEM......

Yes, you can buy your home back, you can bid on it just like all the others, including the bank...... who normally buys it back from the Court. By the bank buying it back, they still get their money back in the settlement, plus they get the home/land back also to resell..... Call it double-dipping....but they do it and come out smelling like a rose!!! They buy it at auction and resell it at high market!!!

Normally, the bank/mortgage company that is auctioning off the property will NOT LET THE PREVIOUS OWNER outbid anyone to get the home back, especially if its cheaper than what is owed on it....... they will run the bidding up.....

I bought my home back after the auction. A friend of mine was bidding for me, yet one man would not quit bidding...... BUT AFTER THE AUCTION he sold it back to me for a "nice chunk of change" as his profitt............. SO BE IT, SINCE I WANTED MY HOME BACK!!!

I'm sure the bidder that would not quit - was a "plant" by the bank and Trustee/auctioner as the Trustee knew I was bidding "silent" and so did the auctioner.

But during the auction, I had one mad Trustee and one mad Auctioneer over my telling bidders "what was wrong with the home and what needed repaired" and "that it had a bad title involved"..............

DUH - WAS I BAD?????? Got me thrown out of the auction, lol!!!

I got my home back in the end, but it cost me...... but I still got it back cheaper then what was owed on it.....

SO BE CAREFULL - how you "push" the Trustee and auctioneer..... Yes, they can throw you out, etc......

I KNOW............... but it was still "fun".............

[RickInMich]

Minny,

I'm curious about something. Here in my town, virtually no one shows up at the Sheriff's sale. Actually, I work in the courthouse where the Sheriff's sale happens, and I asked the deputy if anyone comes. He said it hardly ever happens that anyone comes. I've been wondering why that is. I've seen auctions on TV, and there's always tons of people.

Is it because Michigan law is somehow different? We do have a six-month redemption period here, so maybe that puts off the buyers?

What I'm considering is letting the house go and remain in it to save money. Then the Sheriff's sale will occur. We have a 1st and a 2nd mortgage, so I doubt anyone will bid even if there were people present. Then after the six months redemption period, I'm hoping to have my in-laws buy the house from the bank.

That brings up a question I've had, too. At what point does the 2nd mortgage get released? Is it at the Sheriff's sale or after the six-month redemption period? Does anyone know? In other words, once the 1st mortgage bank takes title, does the 2nd then "disappear"?

[BKcrazy]

I threw myself out. I just got notice yesterday that the stay was lifted by the mortgage company. I feel bad about leaving stuff in there and a bed. I just ran out of time. So, I wonder who gets the stuff in there? The mortgage co, title co, or the new owner?

[RickInMich]

I threw myself out. I just got notice yesterday that the stay was lifted by the mortgage company. I feel bad about leaving stuff in there and a bed. I just ran out of time. So, I wonder who gets the stuff in there? The mortgage co, title co, or the new owner?

BKcrazy, how long were you able to stay in the house without making payments?

[FreshLikeADaisy]

BK, I forgot to mention in the other thread, when the lender prepares your house for resale they clean it out, and have people they pay to do it. If there's stuff in the house, they bring one of those big dumpster looking things and park it in the driveway, but I was told off the records that if there's anything worth anything, they keep it or resell it at flea markets, etc. That made me feel a lot better because a couple of things I couldn't take (a solid oak couch/futon, for example) were just too nice to be thrown out, and I was relieved that it would at least be sold. I can't remember who told me all this, it may have been the sheriff's deputy. I did have a neighbor tell me later that they brought the big dumpster thing (which I expected, since I had garage-sale furniture) after I left, too.

[FreshLikeADaisy]

Okay Folks, the visuals were GREAT........

BUT REMEMBER, at auction stands the Trustee...........

THUS...........

1. If your house/land is being auctioned off by the Trustee for your bankruptcy case...YOU CANNOT refuse to let anyone look at you home. Your door must be OPEN to anyone that wants to see/look at it after the auction sign goes up. OTHERWISE, you can be forced to move out before auction.
2. If you try to "trash" or "jeapordize" the auction in any way, the Trustee can stop the auction, throw you out/or have you arrested, and continue his auction another day or same day AFTER he has you removed (arrested) from the premises...

Minny, I think this may differ from state to state. In my case, there was a foreclosure sale (auction) but it was like Rick in Michigan described: they are at the courthouse, and no one shows up. Neither before nor after foreclosure did anyone ever tell me I had to make the house available for viewing, and if I recall correctly it wasn't in the papers I was given, either. It was pretty much my castle, and my castle alone, until the sheriff's deputy exercised the Writ of Possession (eviction papers).

I completely agree it would be unwise to *actually* trash the place at all, auction or not, and at least put Gramma in a nice dress , but seriously, what you went through sounds completely different than what I went through, not least of which the auction was held AT your house, and not the courthouse. I'm thinking that is part of what varies from state to state. I also think that your ideas about the other bidder are probably very accurate. I'm *glad* you told those people what they were getting into!!! I've been thrown out of better places for worse reasons myself, Minny, so I admire your chutzpah!

[BKcrazy]

BKcrazy, how long were you able to stay in the house without making payments?

I stopped paying Aug 2007. I'm guessing I could have still stayed there, but I left the state. The trustee sale is coming in March, so maybe a bit of time after that would be guess to have left. I'll guess total time could be about 9 months.

[BKcrazy]

BK, I forgot to mention in the other thread, when the lender prepares your house for resale they clean it out, and have people they pay to do it. If there's stuff in the house, they bring one of those big dumpster looking things and park it in the driveway, but I was told off the records that if there's anything worth anything, they keep it or resell it at flea markets, etc. That made me feel a lot better because a couple of things I couldn't take (a solid oak couch/futon, for example) were just too nice to be thrown out, and I was relieved that it would at least be sold. I can't remember who told me all this, it may have been the sheriff's deputy. I did have a neighbor tell me later that they brought the big dumpster thing (which I expected, since I had garage-sale furniture) after I left, too.

Ok. My friend went through the place and grabbed stuff she thought I would want plus what she knew I wanted. I unplugged the fridge since I shut the electric off. But, I had a pile of papers. I'm sure they were crap, but I'm a shredaholic. She went through the pile and said she didn't see much that was important anyway. Just slight worry something with my ssn was there, but I'm so paranoid about that I think I shredded that stuff. I left a great double pillow top king size bed that I was going to sell for $50. Of course I got contacted after I was gone. There's some clothes, shoes, toiletries and stuff like that. And who knows what else. If they donate the usable stuff, that will make me feel better. I felt bad leaving like that, but it was miss my plane or just get out and start over. A friend of mine said to me, well your place is now your own big personal garbage can. That still makes me chuckle. At least I didn't let wild pigs run through the place huh?

[tay666]

Minny - if you get a chance, could you please chime in on this thread

http://www.bkforum.com/showthread.php?t=20906

Basically I have some questions about what happens when the Trustee declairs your house an asset of the estate.
Your experience would be greatly appreciated.
Unlike you though, I actually want him to get a good price on my house.
Would love to pocket my $10,000 homestead exemption and get rid of my house also.
I just have some questions on the timeline and procedures.