On an auction, under the transaction history, it shows
Submitted by djrendina on Tue, 08/19/2008 - 5:16pm.
a 1st loan amount and a 2nd loan amount. When you go to bid at the auction are you responsible for the amount for the 2nd or is it wiped away when you bid on the property? Also how much $$$ do you need to show the acutioneer in order to bid.
Comments:
If you are buying a first, the second's security interest in the property will get wiped out and you don't need to worry about it. You need to show 100% of the amount you attend to bid to the auctioneer. There is no financing at the trustee sale, you have to pay in cash.
--- Keep in mind that laws vary by state, so this may be different in states other than CA.
And remember you should always verify the positions we show in ForeclosureRadar before bidding. We are NOT doing full title searches on the properties and the positions are estimated from computer models and should not be relied on to buy property.
Assuming you are bidding on the first, the second is wiped out. You need to show the auctioneer the amount of your bid, this is what you will pay if you are the high bidder.
Thanks for contributing Scott. In the old days when there was less going to sale and things were more competitive I would always recommend showing the auctioneer more than you planned to bid. While trustee sale auctions are held in the public, it is usually better not to let the dealer see your exact plan as that information may accidentally slip into your competitors view.
Thanks for the advice, I appreciate any little tips you are able to share. Do you experience much collaberation w/ potential bidders prior to the acution - If two people are going to bid, seems like they might be able to come to some sort of agreement before the bidding starts? Would such a conversation be in violation of any law?
Just curious.
Not a great idea. There is a California court case on exactly this issue that illustrates how costly this can be. Unfortunately I was unable to locate it. As I remember two regular bidders decided to partner on a property sharing the work and profit, but the judge determined the primary reason they partnered was to eliminate competition in violation of the law (below). I believe that in their case it was far more costly than an initial read of the law implies. I believe they essentially had to make the prior owner whole forfeiting money spent on repairs, paying legal fees, etc. Definitely a cautionary tale - if anyone can find the case, please post it here!!
CA Civil Code 2924h
(g) It shall be unlawful for any person, acting alone or inconcert with others, (1) to offer to accept or accept from another,
any consideration of any type not to bid, or (2) to fix or restrain
bidding in any manner, at a sale of property conducted pursuant to a
power of sale in a deed of trust or mortgage. However, it shall not
be unlawful for any person, including a trustee, to state that a
property subject to a recorded notice of default or subject to a sale
conducted pursuant to this chapter is being sold in an "as-is"
condition.
In addition to any other remedies, any person committing any act
declared unlawful by this subdivision or any act which would operate
as a fraud or deceit upon any beneficiary, trustor, or junior lienor
shall, upon conviction, be fined not more than ten thousand dollars
($10,000) or imprisoned in the county jail for not more than one
year, or be punished by both that fine and imprisonment.
Nice answer! Makes sense.
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