Profile picture for elgordo111

As a note holder in a foreclosure, how likely am I buy the property? (details)

I am one of three note holders on a property that is in the process of foreclosure: 

Note holder 1: Bank A ($650K owed) 
Note holder 2: Myself ($100K owed) 
Note holder 3: Bank B ($700K owed) 

"Bank A" has sent a notice of foreclosure with a scheduled "sale date" for mid-November (which I assume is the auction date). It is my understanding that Bank A will bid the amount they are owed.. I would happily bid up to $1m, because I love the property and think it is worth much more. 

Is "Bank C" likely to outbid me, considering that is more than they are owed? 
If "Bank C" does outbid me, do I have an option to bid higher? 

I realize I sound extremely foolish here, but I did not expect my personal loan to result in the property's foreclosure. And (obviously) I have never been in this situation before. 

I have a call scheduled with my attorney later this week, but wanted to get some insight from the community first! 
  • August 07 2012 - US
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (2)

Profile picture for elgordo111
Thanks for your input- the state is Colorado. 

Does this change anything? 

PS.  Talking with our real estate attorney tomorrow. 
  • August 07 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

You didn't mention the state where the home is located and laws vary from state to state.

For example, in MN lienholder #1 typically purchases the property @ auction as they hold the greatest debt. They then have 30 days to offer the property for sale to the 2nd lienholder. As often the debt of the 2nd lien holder is far less than the overall debt owed, the 2nd lien holder opts not to purchase the debt from the 1st lien holder.

Check with your attorney to determine if this is how the foreclosure laws are structured in your state. If the laws are similar to MN, this could prevent you from having to engage in a bidding war with the bank. You will also want to know the redemption laws for your state and whether lien holders have recourse should your plan not work out.
  • August 07 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.