Is it legal to bid on a foreclosed property if

[PandaBear]

if you default on the loan?

No, I'm not the person doing it, just living in a city when the downtown development project got foreclosed for $108.8M and the party who default now wants to bid on it.

http://www.bizjournals.com/sanjose/news/2011/08/17/no-bidders-on-sunnyvale-town-center.html

 

[Cristobal]

Of course they can bid on it. But a bank manager accepting a bid from a party already foreclosed on, I would expect, might find his judgement questioned by his superiors. The Romans had a saying about a fool and his money soon going separate ways.

 

[hattaresguy]

Yeah sure anyone can, if I defaulted on a project like that and was able to I would bid on it.

Usually with projects that big they have negotiate a bit with the bank, something obviously didn't work out.

 

[Drew99GT]

I think I'm gonna try this with my mortgage! Cut half the principle out...

 

[CivicFan]

For corporations it's different.

With individuals, I have seen instances when the bank forecloses on a house and evicts the former owner. Then they auction it off to investors where the property sells for a fraction of the original mortgage.

The borrower is not allowed to bid, and the bank does not work with him/her to reduce the principal amount of the mortgage to what the fair market value of the home is. I suspect it's either a policy to streamline the foreclosure process, or laziness/resource constraints of the bank staff.

 

[GROUCHO MARX]

I know the lenders look very carefully on who's involved in short sales on the buying end.

 

[Cutehumor]

Originally Posted By: GROUCHO MARX
I know the lenders look very carefully on who's involved in short sales on the buying end.


you have to sign some kind of affadavit saying your not related to the homeowner or selling the home back to the homeowner to cheat the mortgage company out of cash.