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"Scott" <fskennedy@gmail.com> wrote in message
news:1172080218.741459.102040@v33g2000cwv.googlegroups.com...
> Who do you think will buy the house at the sherrif's auction?
>
> Bank 1 - $ 415,000 (foreclosing entity)
> Bank 2 - $ 50,000
> Probably $ 6,000 in back taxes
>
> House probably worth $ 435- 440,000
>
> What is the typical amount a bank would be willing to lose to avoid
> buying a house?
>
> Thanks,
> FSK
>
Assuming Bank #1 is holding a 1st mortgage and Bank #2 is holding a
second. Being bank #1 is the one foreclosing, they have a judgment for
the total amount owed. They will probably bid the judgment as it will
not cost them anything to do that. Bank #2 will get wiped out in the
process. If bank #2 was to bid to protect their mortgage, they will need
to outbid bank #1. It would be to bank #1's advantage to stop bidding
around $$400K to $410K. That way, the least they lose is $5K to $15K and
bank #2 takes on any remaining risk of ownership and the expense of
sale. If bank #1 had played the game right, they would have waited and
let bank #2 foreclose on their second mortgage. That way, the sale on
the courthouse steps would have still been subject to the first
mortgage.
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Re: Which Bank Do You Think Will Buy this House At The Sherrif's Auction?
