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We warn people over and over again to make sure they understand the implications of what they are doing when they decide to purchase at trustee sale. I happened to run across an old post on the discussion board outlining just what can go wrong.

The HOA just foreclosed on a house and I just bought it at an open bid at the courthouse for $176,000.

Later the same day, I discovered that the house has a first mortgage for $90,000 and a second for $35,000. I thougt that after the HOA are paid their owed amount of $3,700, the first and then the seconnd mortgages will be paid off and the owner will end up with the remaining balances of $47,300.

Now, I am told that the owner will take $172,300 and I have to pay the first and the second mortages myself and in effect I bought the house for $301,000!!!

How can this be?

Why doesn’t the courthouse use the sales proceeds to pay off all that is owed on the house before they transfer title to me?

If this is true, then I do not want to buy the house at this price?

Note that the poster states they found out later that same day there were two senior liens and they thought senior liens would be paid from a junior lien foreclosure auction. That’s not the case anywhere I’m familiar with. What’s even more interesting, in my opinion, is the winning bid. How did it get up to $176,000? Either the poster had no idea of the auction process and just threw out a number or there was more than one person at the auction who had no idea of lien priority.

From Post Gazette:

As part of a crackdown on scammers preying on struggling homeowners, the Federal Trade Commission said Thursday that it nabbed a Florida company that lured people into paying up to $2,500 in upfront fees by falsely claiming it would save their homes from foreclosure.

The company, Home Assure, did little or nothing to help consumers avoid foreclosure and often refused to honor a “100 percent” money-back guarantee, the FTC said. The company typically charged an advance fee of $1,500 to $2,500.

This is a common story in today’s news, a byproduct of financial times that have devastated many families across America. Sadly, those who don’t have significant financial resources are the ones that seem to be targeted by those offering dreams and promises instead of beneficial assistance.

There are companies providing loan modification assistance who actually do provide help to consumers by pre-qualifying, assembling the necessary documentation and supplying the loan servicer everything they need to be able to make a determination for a loan workout. Fees should be significantly lower than the numbers provided in the article and they’ll usually provide a fairly quick answer regarding whether a modification is probable or not.
How does this help the consumer?
A large number of failed modifications are due to insufficient information provided by the borrower. Servicers aren’t going to chase after the borrower to supply the information, the borrower has to take the initiative to provide everything the servicer needs and it’s usually best if all that information comes in one complete package. The better modification companies will make sure there is a complete package that has a good chance of lender/servicer acceptance.

There are also programs available if the borrower is willing to assemble a package and follow it through the process.
Hope Now is a good place to start.

Had a visit at my front door with some representatives of the Unification Church. For those not as old as I, they were known as “Moonies” years ago, a takeoff on their leader Sun Myung Moon. We don’t get a lot of door knocker types because there are significant hills where we live, but we do get those occasional hardy souls who feel the need to spread their message.

What struck me as very funny about these two was their almost total lack of the English language. I’m guessing they were Japanese and I do have Japanese speaking neighbors, but the predominant neighborhood language is certainly English. While I did my best to explain I was busy at the moment, they kept referring to their laminated 8.5″x11″ cheat sheet with English translations of common responses.

Monty Python is what kept running through my mind.