#1EddieJanuary 19, 2008, 9:22 am

is it illegal to remove a furnace from your (formerly) house in the redemption period? seems like quite a scam..

#2Scott FicekJanuary 19, 2008, 10:21 am

Nope. You legally still have all the rights as the owner of the house. You could paint it pink, remodel it, even sell it.

It doesn’t happen often, but I do see it. Usually it is not about the materials (furnace, cabinets, etc), it is about the owner being frustrated at the system/bank and wanting “to show them”.

Rumor has it that they bank can sue the owner for the damages, because it does violate the clause in the mortgage that you must maintain the house in livable condition, but I can’t imagine the bank ever does that as they are already taking it back.

#3MN Real Estate AttorneyMarch 20, 2009, 8:37 am

This is great advice. You articulated in plain terms why buying foreclosed property in Minnesota is risky.

#4AlexMarch 30, 2009, 11:30 pm

Yes, it’s true that there is a risk of “overpaying for destroyed house” when buying at the sheriff sale. But if you are buying a house pennies on the dollar – I agree that not every house that goes into foreclosure would be a good investment – then this scenario may not be that bad. Especially considering the fact that most REOs are sold close to market value – there ain’t that many true bargains there, i.e. pennies on the dollar type of deals.

#5Mr.XJune 18, 2009, 8:06 pm

Buying at Sheriff sale is MN is a great idea under a very narrow set of circumstances. What is more interesting and useful is buying an assignment of the Sheriff’s certificate of sale from the foreclosing lender, which is typically the highest and only bidder at a Sheriff sale. An assignment allows you to see if the lender underbid (meaning bid less than the actual amount owed in an attempt to interest parties in purchasing redemption rights or redeeming as a junior creditor pursuant to Minn. Stat. 580.24. In short, unless the owner is dead, missing in action, the property vacant, there are no junior liens which can be bought via an assignment and used to redeem the property and in this case where the owner simply will not deal with anyone (which is not uncommon at all) there is no reason to buy at a Sheriff sheriff. Better to conserve capital and turn 6 deals in the same period of one full run gamit of foreclosure. Side note: If any lenders or foreclosing attorney for lenders in MN reads this, here is a TIP: IF YOU ARE GOING TO UNDERBID YOUR CLIENT’S MORTGAGE AT THE SALE (i.e. 750K owed, and you bid 250K) INCLUDE THAT LANGUAGE IN THE ADVERTISEMENT AND MORE PEOPLE WILL SHOW UP AT SHERIFF SALES. (ideally, your clients would just assign the mortgages and let an investor reforeclosure at the full amount insuring they get back the property. Just my two cents worth.

#6RCCDecember 3, 2009, 7:19 pm

So i have a one for you… What if a short sale negotiator tries to redeem the property after redmeption has expired. They filed to redeem about a month ago, however never redeemed the property. What happens in this case?

#8KJanuary 12, 2010, 12:52 am

I have a short sale offer on a house that we just found out is 3,000 under what the seller owes plus they pay 5,000 of the closing costs. Do you think this is a decent offer for the bank to accept? Our offer was finally submitted to the bank two weeks ago after after 4 months of negotiating with the seller. The sheriff sale was last week. Will the process drag out longer due to it already having the sheriff sale? The bank is Wells Fargo.
Any info would be helpful.

#10D&R BraatenFebruary 1, 2010, 9:36 pm

My husband and I made an offer on a house on January 3 that has two liens-(80/20 – with two different lenders). Four days after we made the offer, the house was sold in a sheriff’s sale (Our realtor thinks that one of the lenders bought out the other). The listing agent did not tell our agent until a couple of days ago. The owner did not want to sign our purchase agreement unless the bank would agree to forget the balance…The house is now in its redemption period.
Would you advise my husband and I to move on and look else where? How low could this possibly take?

D. Braaten

#12Tina SchraderFebruary 23, 2010, 9:59 am

I need advice! We made an offer on a short sale in July 09. Our realtor checks in regularly with the listing agent to see if our offer was accepted by the bank but we are still waiting (9 Months now). I did some digging today to find that this house went up for sheriff’s auction in Jan. The bank bought it. The owners are moved out but there is a 12 month redemption on it from the date of the sheriff sale Jan 10. I found all of this today. Our Realtor and the listing agent never told us any of this was going on. What is going on here? Should we just walk away? This was such a beautiful house–our dream house really. I’m trying to get educated quickly here but I don’t know what to do next.

#14KFebruary 27, 2010, 9:58 pm

Update on our above situation. We heard back on our approval from the bank (Wells Fargo) on Friday. 60 days, or 45 business days, After the package was submitted to the bank. This makes a total of 6 months after our initial offer was submitted to the seller. The bank took a blow of 3,000 from our offer, 10,000 for the agents commisions and 5,000 for our closing costs totaling at 18,000 below what the seller owed.

#16dJune 8, 2010, 5:25 am

I have a cousin that allowed his property to be foreclosed on, but something he told me doesn’t make sense.

Basically, he said that when the property went to a Sheriff sale it sold for $130K, but then the property was later sold via short sale by my cousin (I assume during the redemption period) for $165K. He has told me that even though the mortgage balance was above $165K, the mortgage company was only entitled to get back what they paid at the Sheriff sale. Is he correct, or just going to find himself in trouble?

Can I assume he’ll have to pay income taxes on what he “profited” as well?

#18KJune 25, 2010, 9:49 pm

We have an opportunity to file an intent to redeem on a house that is currently in the foreclosure redmeption period. (We were able to obtain this right to redeem by buying the junior lien-holder’s rights and having those rights transferred over to us) Our question is how do we obtain financing? We assumed that a traditional mortgage would be able to be applied to the purchase, but we are finding that the lenders we have contacted are telling us that we can not use a traditional mortgage. Any ideas?

#20KJune 28, 2010, 10:23 am

Thanks Scott. That is pretty much what the consensus is when I ask.
Question 1) Do you have any resources/leads of hard money lenders?
Question 2) We are not planning on flipping this home, but get a hard money loan, then refinance and live in it long term. How long after the initial purchase can you do a refi?

#22KJune 30, 2010, 8:51 am

I received more info from our lender. He said the reason they can not do a traditional mortgage is that there is no purchase agreement. Since we are redeeming an interest in the property vs. purchasing it, one is not required, but is there any reason why we couldn’t draft up a purchase agreement and have the bank as the seller and owner sign off on it?
Thanks for your input.

#23mike kuehlJuly 27, 2010, 10:21 pm

there was property with a mortage of $226,000– sold at Sherriff sale for $145,20 ( bank bid $145,000)-purchased by private individual– Owner is now going to redeem and sell for $170,000- does the bank have any recourse since they were not the buyers at the Sherriff sale ?

#25mike kuehlJuly 28, 2010, 11:48 pm

Thanks for your reply—,the owner is going to redeem and sell to another party–does he need to redeem prior to selling to the second party or can he use their money to satisfy the redemtion (redeeming after the sale)–keeping in mind that the property was purchased by a private individual

#26Scott FicekJuly 28, 2010, 11:52 pm

No. That can be handled at the closing. The title people get the pay off for buying the certificate and then do the deed transfer all at the same time.

#27KimberlyJuly 30, 2010, 9:07 am

There was a property with the 1st mortage of $210K, the 2nd mortgage of 55K. It was sold at the Sheriff sale to the 1st mortgage lender for $175K. The owner is my friend and willing to sell it to me during redeem period. How do I proceed the purchasing? Can I offer under $175K? Will the 2nd mortgage have a lien against me or the property or the owner? Thank you

#29danOctober 13, 2010, 2:38 pm

I have a home that is just a couple months past the sheriff sale process. A guy comes to my house and says he will pay me $20K to sign over a quit claim deed to him. He says my mortgage will be forgiven, all i have to do is to keep the property in decent shape meaning dont trash anything. I figure I will just lose the house anyways so why not take the money. But what does this guy have to gain? And will I be at fault for anything? I owe 190k on the mortgage. the sheriff sale was for $55K and the market around that neighborhood is about $80K-90k in decent shape.

#31chrissyOctober 29, 2010, 2:54 pm

I am in the process of forclosure. the sheriffs sale has not been set yet. the mortgage company is still looking at modifications. i have a potential buyer for my house if i short sale it. is it best for me to just sell the house on short sale or finish the modification process and hope i am approved. Ideally i would like to keep my home, but i owe 286,000 and its worth 198,00. also is it better for the buyer to try and bid on the house at the auction or wait for the bank to buy it and then do a short sale? I’m so confused about all of this. I live in MN btw.

#33LauraJanuary 3, 2011, 7:49 am

My single brother passed away and his home is scheduled for a Sheriff sale. The mortgage company is owed 220,000 but the home is worth 125,000. A relative wants to purchase the home. Should they attempt to purchase after foreclosure? What do you recommend?

#35DanKAugust 14, 2011, 12:28 am

Where can I find property listings that have gone to the Sheriff’s sale and are now in the redemption period?

Also, does one need an attorney to buy during the redemption period or is a qualified agent good enough?

#37chrisAugust 20, 2011, 12:03 pm

I have a question. Our home loan was with a predatory lending company. They had no mercy, I am not saying they needed to, but… in this country right now, well, my husband worked morning till night for the company he worked for, they still decreased his pay and then closed their doors. Our mtg. company denied us hardship in this time, we begged for loan mods, were denied, we hired a lawyer and found out he was a scam a couple weeks ago by certified mail-we got a notice to call a broker-our mtg comp bought our home back, we had three wks to vacate. It has been a whirlwind. I have learned a lot. Investors have told me they will invest in another home for us, but not our home. One told us it was illegal. Is that true? Is there absolutely no one that will help? Thank you for your time.

#39chrisAugust 20, 2011, 12:05 pm

Oh, I’m sorry, I live in MN. The orig. mtg. was $254K, they bought it for $112.5K.

#40JudeSeptember 19, 2011, 12:37 pm

I just found out that my ‘right to redeem’ means at sheriff sale price plus interest and costs rather than the original mortgage–market value is now about 70K and my notes total 115K. My sheriff sale is scheduled for mid-October–I’m a MN homeowner and I am planning to file bankruptcy also to relieve other debts.

Originally I thought to delay the sheriff sale by filing bankruptcy thus being able to stay in my home a bit longer but now I think I may have better financial options. Emotionally I am prepared to let go of the property and I may have a couple people (a tenant and a son or brother) able to help me by either lending the money to stay or purchasing the property from me if the sheriff sale price comes in lower than market value.

I do have an attorney and am waiting for his advice but I’m not so sure that he is savvy about real estate options. What do you see that puts me in the best financial position? What are the usual interest and costs incurred and added on top of the sheriff sale price?

I so appreciate everything you have shared with others. Thanks for your time.

#42DanKSeptember 19, 2011, 1:20 pm

Jude,

During the Redemption Period a relative CAN buy the house for the redemption price (auction price price legal and daily interest fees). You can sell it to anyone you want – it is still your house.

But if you want to negotiate a short sale during the redemption period (possible) for less than the redemption price the banks will squawk if it is a relative buying it (I have seen it been done before).

You can buy with an LLC to hide the real owner. It will look like a typical investor and the bank won’t care too much. You should use a non-real estate agent who is familiar with the redemption process though. Cost about $1500 or so and worth the money.

Why a non-RE agent? To avoid the most stringent legal constriction imposed on RE agents. In the end there will be two transactions and a pass through to your relative. Easy to do and perfectly legal (like the banks are law abiding anyway, right?)

The big question will be if your place is worth the auction price or not.

#43DanKSeptember 23, 2011, 1:59 pm

I have a relative in this situation in MN.

Her house sold at auction for less than its current value. So I helped her sell the house to a cash investor. She has two notes.

The second note bank is willing to work with the investor to buy the house (they get some cash of course).

We can either:

1) wait until the last week and have the second note bank put in their intentions to buy out the first (they have an agreement for the investor to buy it from them). or…

2) have my friend sign a PA (to sell) and finish the transaction before the last week of redemption (in essence she redeem the property herself).

Both will get the house sold. But I wonder:

1) which method is advantageous as far as deficiency judgements.

2) which is better tax wise.

#44dflSeptember 30, 2011, 5:01 pm

My mother passed away owing about 105k on her townhouse. We let it go into foreclosure and it sold at sheriffs sale to the bank for 102k -the property tax market value. If they sell the house for let’s say 70k, can they come after the estate for the difference 32k or the 35k? This is minnesota. How wouild the expriation of the redemption period play into this? Thanks.

#45Caught in the middleOctober 7, 2011, 6:48 am

I living in MN and am currently renting a home that is being foreclosed on. The Sheriff’s sale will be in a few weeks. The mortgage is with Wells Fargo, N.A.. Amount owed is $130K and property value is around $120K. We live in a small town (pop. 3600) and there are over 200 homes for sale currently. We would like to be able to continue living here. Should we try to put in a bid on the home at the auction, or try making a short sale offer to the owners now? I am in school (mid-life career change) and to make this fiscally advantageous to us, we would need to be able to get the property for $50K. Any chance this is even feasible?

#47wtffOctober 14, 2011, 8:04 pm

I have got a difficult situation for you. I live in MN, 1st mortgage is with Citi for 280K, there is a second of 220K with a local bank that was used as a business loan. We put the house up as collateral for the business loan. We closed the business and the bank still wants full payback. We filed chapter 7 and Citi has not scheduled a sheriff sale. The local bank did schedule a sheriff sale for end of November. I called citi and they were clueless on the sale date. They also said our trustee has not yet closed the case and it was still in the “active bankruptcy” file. So my questions are……can the local bank (or anyone for that matter) buy out the first before our case has been closed by the trustee? then what would happen at the sheriff sale? would the local bank show up and pay Citi 280K at the sale and own the house? The numbers are not there for the local bank to pay Citi 280K, include the 220K from current loan and then sell the house for 450K……last question is once the sheriff sale is over can we still approach Citi about loan modifications? or do all negotiations have to be finished by the date of the sheriff sale?

Thanks and great advice in all the above posts.

#49meOctober 18, 2011, 10:59 pm

We are interested in a foreclosure home in MN. Bank paid 310K for it at Sheriff’s sale. House is valued a little over 500K. Do we make an initial offer close to the 310K?

#51hal1November 25, 2011, 4:08 pm

I recently purchased a house and 14 acres in st pael on the last month of a 12 + month redemption period…I purchased the first and second for face AT $220K…tried to negotiate with the owner prior to end of the redemption period… no interest on his part…on the day of redemption expiry he torches the house….as it turns out the property is worth more than the mortgage and the house was insured for 250 with my mortgage having the primary beneficiary designation…despite the fact that the previous owner was ruled to have committed suicide a biologically distant relative is claiming they should receive the insurance proceeds…can they really hope to get the benefit of his suicide and destruction of my collateral that transferred that same morning? that seems an impossible result? do i not have the right to receive that insurance proceeds to restore my properly foreclosed and redeemed collateral? otherwise everyone would burn there house at the last minute in hopes the proceeds exceed the loan amount?

#53LBJanuary 23, 2012, 12:41 pm

I live next door to a house that has been vacant for nearly 2 years. The title is still in the former owner’s name although he, himself, has not lived in the property for about 4 years.
It has been listed by a realtor for close to 100 days, with the price going down dramatically along the way. It sold for $229K in 2005 and is now listed at $91K. No lookers and no offers that I’m aware of.
This is an interesting question for you – would a bank (once they own the property) ever consider making a gift to a good cause? I’m interested in the property for a non-profit endeavor, but am unable to pay full market value. I would like to make an extremely low offer with an explanation of the use.
Yes – I’m in MN.