Saturday, April 19th, 2008 at 3:53 PM
REO-List Format Questions
Miller Time asked for some clarification on the REO format.
Below you see a snapshot of the REO lists found in the right-hand column under ‘San Diego County REOs’. The original loan amount is listed, and the delinquent amounts (circled in red and blue). When you add those two amounts plus some administrative costs, you get the Minimum Bid listed below – at arrow.
But the Saleprice listed is substantially different – why?
The second entry shows a saleprice (circled in yellow) that is above what was owed, yet the bank was still the buyer. That happens when the second mortgage holder is foreclosing – they must have thought there was enough equity that they were willing to pay off the first, and take the property back when no one else at the auction wanted to pay more than the $239,031.
If the first lender is foreclosing, and ends up taking the property back, then the saleprice listed here is typically the same as the Opening Bid - and no bidders wanted it at that price. It used to be that the minimum bids and the opening bids were close to the same amount. But the lenders are getting aggressive at the courthouse steps, and many of the opening bids are WELL UNDER what’s owed, yet there still isn’t any takers on most of them, and they still revert to the beneficiary.
If the beneficiaries are seeing more trouble ahead, it seems natural that they would be unloading everything they could at the courthouse steps – where there are few concerns, if any, other than price. The beneficiaries get cash immediately, they pay no closing costs or commissions, and they can dump dozens at a time – when there are bidders. But they are doing a poor job of announcing the opening bids, and if they could get the word out earlier about what they are willing to take, they’d get more people showing up at the auctions.
For now, you are left to three websites; www.fidelityasap.com http://www2.rppsales.com/ and www.priorityposting.com where you can find some of the opening bids. But for those lenders that don’t publicize, you either have to call or literally go down to the courthouse to find out the bank is willing to do.
Posted on Saturday, April 19th, 2008 at 3:53 PM in Foreclosures/REOs | 11 Comments » | 
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Jim,
I thought I should add for the benefit of some of your readers interested in this process, too, that the min bid wasn’t posted or available from the auctioneer at the courthouse even at the start of the auction.
I went to check on a house with an earlier "min bid" and "amount owed" of about $630K listed on popular websites like foreclosures.com. You indicated that the min bid on the court house steps is less lately, so it might be worth while. And you were right.
But what was strange is that right up to the start of the auction, no min bid was published at Priorityposting.com. And when I sidled up to the auctioneer’s assistant beforehand she said that the property would indeed be auctioned that day, but they had no open bid yet. About every 30 minutes the auctioneer paused the auction, got on the phone with his office, and received a "release" of additional properties on his auction list from that day and received an opening bid amount from them.
I had a PDA and noticed about 45 minutes before the call he got involving my property, PriorityPosting published an opening bid of $607K on their website, which turned out to be the case on the opening steps.
But if you had waited for the publication of the opening bid, you’d have been too late for the auction, since it was only published halfway through the proceedings.
$525K would have caused me to buy; $550K probably still would have been a good deal. $607K was a little too rich for me, although I bet they get at least that price if it goes up retail (but then they’ll also be paying the lien against the property, the commissions, and other holding costs, so it’s questionable if the bank did the efficient thing with that price).
lgs | April 19th, 2008 at 6:14 pmThank you Jim for this wonderful post. I admire your complete open-ness and sharing of information. I won’t be buying a house soon, but you can bet that I will be recommending you to anyone who asks.
jb | April 19th, 2008 at 7:43 pmThanks jb.
Like lgs above, I’ll tell a story about these crazy banks and their opening bids – but in reverse.
A house that has been talked about a lot in Poway – 17812 Old Winery Way – wound up falling in our lap after the agent tried to sell it to two other offerees for $2.3 million.
We’re were solid at $2.2, but not a penny more. It is a short sale, and the loans total $2.9 million, so they agent wanted to get as close as possible.
But because we were the only one left standing, she submits the $2.2 to Countrywide.
CFC had already filed the notice-of-trustee sale, but had postponed it. To keep the foreclosure process alive, all banks have to keep posting updates, or start over on the 111-day timeline.
So when Countrywide re-posts their next trustee sale date, they also publish the opening bid:
$1.845 million.
I’m looking for stuff like this but my eyes about popped out of my head – not only is the price way below what we offered, but the sale date was only a few days away.
They wait until the afternoon before the sale to postpone the sale date again – but up until then we thought it was happening.
A couple of weeks later, they approve our sale at $2.2. We say, thanks but no thanks, but we’ll give you $1.9.
They weren’t interested – and supposedly they have another $2.2 deal in the works.
Jim the Realtor | April 19th, 2008 at 10:09 pmThanks so much for the back story to Old Winery Way. I too have been watching it and thought the updates, delays, etc were odd. But now I know what happened.
I assume you have seen the interior; it looks like the interior designer from The Venetian in Las Vegas was hired for it. Yikes.
Keith Rettig | April 20th, 2008 at 1:14 amI love these inside baseball stories. You gotta wonder what manual they are reading out of that tells them to refuse $2.2 and re-ask lower.
It was like watching those last two innings of the Padres game at "Fred’s" in the Gaslamp District earlier this evening.
Rob Dawg | April 20th, 2008 at 4:26 amWelcome to town Dawg.
Do you get the feeling we might not recover from that 22-inning game? Our stats, from ESPN:
"San Diego entered with a .242 team batting average, 13th in the NL. The Padres have been outscored 31-6 during their four-game skid, which includes a 2-1 22-inning loss."
"We’re just not playing good baseball," Giles said. "We’re not putting any kind of pressure on the opposing teams with our offense, and that’s just part of baseball. You hit one of those ruts, everybody’s going to go through it."
Jim the Realtor | April 20th, 2008 at 4:37 amMy 3rd grader is overnight in Sea World with her brownie troop. We’ll join her tomorrow. Sorry, no coffee this time. Mna, a dribbly grounder that was beat out anyway but a bad throw besides then off the outfielders’ glove and then 2 runs durring commercial it seemed like. I felt like I was back in college in Boston within cheering distance of Fenway.
Man, those downtown condos. What is up with living over a Long’s Drugs in a glass box that gets snined in on ever time someone parks in the garage across the street? Most looked empty and nothing but cranes on the skyline. The night scene is pretty lively however.
Rob Dawg | April 20th, 2008 at 4:56 amMore on Old Winery.
Houses on this street literally back up to the old winery – Bernardo Winery. It’s my duty to check out the neighbors like this, and I find the usual wine tasting facility and a few small shops. And a large outdoor meeting area.
So I go to the office, where the lady was too busy to talk to me but she had the schedule on the wall – and sure enough, weddings are scheduled on Saturdays.
I come back on a Saturday night at 8:30, and it sounds like a rock concert – the DJ is full blast, and every attendee is singing along to a John Mellencamp song. Ouch.
Jim the Realtor | April 21st, 2008 at 9:21 amI double thank you for the neighbors story! I was looking at how such an expensive home could back up to a business; a business that looks like a flea market in it’s Zillow image. Had me worried and now I know I was right to think it.
Keith Rettig | April 21st, 2008 at 10:30 am"$1.845 million.
I’m looking for stuff like this but my eyes about popped out of my head – not only is the price way below what we offered, but the sale date was only a few days away"
REO listings and auction procedures strike me as a form of bait-and-switch.
If I decided to put in an offer on a house and actually offered the listed price, if the seller came back with a counter that was higher than listing when mine was the only offer, that would be the end of it – I’d walk away.
Tell me that my offer, once *accepted,* can still be rejected on the basis of price by anyone but my own mortgage lender? Goodbye.
I wouldn’t have bought a house under these conditions when the market was soaring, I’m certainly not going to when it’s crashing.
GeneK | April 21st, 2008 at 5:22 pmI tend to think it just shows the lenders are just totally overwhelmed, stressed, and generally running around like chickens with their heads cut off. Clearly, that sort of behavior was not orchestrated by one person who thought about it rationally.
Dwip | April 22nd, 2008 at 3:11 am