Comments on: Why Buying Properties at Sheriff Sales in Minnesota is a Bad Idea

By: Scott Ficek

Scott Ficek — Mon, 23 Jan 2012 18:43:47 +0000

I doubt they would donate it. They have enough tax write offs with the bad debt they have.

By: LB

LB — Mon, 23 Jan 2012 18:41:06 +0000

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.

By: Scott Ficek

Scott Ficek — Wed, 07 Dec 2011 14:17:47 +0000

I don’t think he can if you had your title work done properly.

By: hal1

hal1 — Fri, 25 Nov 2011 22:08:14 +0000

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?

By: Scott Ficek

Scott Ficek — Thu, 20 Oct 2011 01:22:37 +0000

It doesn’t usually work like that. The bank will put the house on the market for what it considers the market value. You will need to decide on your offer then. They may price it at $400k or $200k, you just don’t know based upon what they paid at the sheriff sale.

By: me

me — Wed, 19 Oct 2011 03:59:46 +0000

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?

By: Scott Ficek

Scott Ficek — Sat, 15 Oct 2011 14:44:44 +0000

These are really questions you should be asking your bankruptcy attorney, but I will tell you how I understand it.

If the both Citi and the local bank debts were put in the bankruptcy filing, they can not, by law do anything prior to the date the court closes the file on your bankruptcy. They know that.

Once the bankruptcy releases the debt, there is no mortgage left to modify. In your example, if the local bank pursues foreclosure, they would have to pay Citi their outstanding balance. Once the sheriff sale happens you have 6 months before the bank owns the house. The only way to fix that would be to pay them the amount they paid that the sheriff sale plus attorney fees to redeem the house out of foreclosure.

I would not plan to do any of this, but simply plan to move. This sounds like a very unreasonable situation.

By: wtff

wtff — Sat, 15 Oct 2011 01:04:51 +0000

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.

By: Scott Ficek

Scott Ficek — Fri, 07 Oct 2011 13:29:26 +0000

You can put a bid in at the Sheriff’s sale, but you would need to pay the entire amount bid on the spot in cash or $120k. A short sale is a good idea, but I recommend that you get a qualified short sale Realtor involved. It is nearly impossible for the average homeowner to do a short sale themselves. The bank pays all the costs (closing, realtor fees, etc) so there is no money out of the pocket of the seller/landlord. You need to get started though as you only have 6 months now.

Lastly, there was a new law enacted a year ago or so that requires banks to honor any existing leases that are in place when they take the home back. So even after the 6 month redemption period (following the sherrif sale), you can stay in the home if the lease has more life on it.

By: Caught in the middle

Caught in the middle — Fri, 07 Oct 2011 11:48:16 +0000

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?