Frequently Asked Questions - Investor

Although it is technically POSSIBLE to purchase directly from the lender prior to them listing the property, it is RARE and very difficult. In most cases the lender assigns the property to an asset manager, who performs the occupancy check, assess the condition of the property, prepares it for sale, and orders a BPO/Appraisal to determine the fair market value. The bank then lists the property and takes offers. To successfully purchase a property from the lender prior to the sale, you must find a decision maker with the lender that has the authority to enter into a purchase agreement prior to listing the property.

We are not aware of a clearly defined time limit on the return of any overage. Contact them on a daily basis and escalate to a manager if you are not getting a response.

Contact the Trustee. This may mean calling them daily for a status check on the Trustees Deed. You may also want to remind them that California law requires that the deed be recorded within 14 days for the sale to be effective as of 8am the date of sale.

It is going to depend on the specific situation. If they have a valid reason to fight the foreclosure, then you may want to work with them to get the sale rescinded and get your money back as quickly as possible. Otherwise, if they do actually file a lawsuit you will need to hire an attorney, though you may want to let the lenders attorney take the lead to minimize your expenses.

You are not obligated to refund the security deposit and the tenants can pursue collection of the security deposit from the prior owner in small claims court. Oftentimes it is easier to offer a cash-for-keys incentive to negotiate a move out date (typically faster than waiting the 90 days) and provide them with some funds to move since it may take time for them to get their deposit back from the prior owner.

Under the Protecting Tenants in Foreclosure Act you are obligated to give a renter 90-days notice if they are renting on a month-to-month tenancy, or honor the terms of the lease provided it is a valid lease, with fair market rents, and signed prior to the Notice of Default. If the renter fails to pay under the terms of that lease, then you would have the right to evict them with 3 days notice for failure to pay.

Provided the Trustees Deed is recorded within 14 days of the sale, the effective date of your ownership is on the date of the sale. Many investors make contact with the occupants right away, but wait until the Trustees Deed is recorded to serve a 3-day notice.

If the property is vacant you can change the locks right away and take possession of the property.

The lender can discount the opening bid or add the additional interest that has accrued on the loan to the published bid. It is impossible to know for sure which lenders will discount the opening bid. Oftentimes the lender is the servicer of the loan for another investor and the opening bid is set by the actual investor. There could be additional interests involved, like the existence of a Mortgage Insurance policy. This may cause the lender to set the opening bid at the full amount owed on the loan.

To bid you need to qualify, which in most states means you will be required to show the auctioneer identification, and cash or cashiers checks sufficient to cover the full amount you wish to bid (though Arizona requires only a deposit).
Most investors take cashiers checks made out to themselves. If you are not the winning bidder, you can easily redeposit the funds, and if you are the winning bidder, you can endorse the check over to the trustee.
Q-How can I get the opening bids even faster?

The lender gets to make the first bid, which is called the opening bid. Some now also refer to it as the drop bid, because lenders now often substantially discount the opening bid from the amount owed. The laws regarding opening bids vary from state to state. In California the lender/trustee is under no legal obligation to announce the opening bid in advance of the sale. They typically release the opening bid the day before or the morning of the sale. Sometimes the opening bid is not announced until the sale starts. The research team at ForeclosureRadar works diligently to post opening bids as quickly as possible. We also provide the trustee name, phone number and TS number so that you can manually call the trustee for last minute information if you prefer.