Foreclosure auctions and investor representation
Download
1 / 12

Foreclosure Auctions and Investor Representation - PowerPoint PPT Presentation


  • 111 Views
  • Uploaded on

Foreclosure Auctions and Investor Representation. By Erik Wesoloski. What we will discuss today. History of the Online Foreclosure Auction System Pros and Cons of the Online Foreclosure Auction System Risks of Buying at Auction

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Foreclosure Auctions and Investor Representation' - jadzia


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

What we will discuss today
What we will discuss today

  • History of the Online Foreclosure Auction System

  • Pros and Cons of the Online Foreclosure Auction System

  • Risks of Buying at Auction

  • Important Legal Doctrines and Seminal Cases that Affect Auctions

  • Common Mistakes Made by Investors at Auction

  • Most Common Legal Work Related to Auctions


History of the online foreclosure auction system
History of the Online Foreclosure Auction System

  • Fall 2009

    • Live Auctions Twice a Week from 11am to 2pm

    • 9 Months from MSJ to Auction

  • Move to the Online System

    • Now 30 to 45 days from MSJ to Auction

    • From 1 County to 21 Counties


Pros and cons of the online foreclosure auction system
Pros and Cons of the Online Foreclosure Auction System

Pros

Cons

Allowed many unsophisticated investors to risk their money with one click of the mouse

People bidding from Panama, NYC, IPhones

  • Leveled the Playing Field

  • Streamlined cases – unclogged the court system


Risks of buying at auction
Risks of Buying at Auction

  • Title Risk:you must know the lien position of the foreclosing Plaintiff

  • Property Condition Risk: buying sight unseen can be expensive

  • Legal Risk, Part I: sometimes when you buy at auction, you are buying yourself a lawsuit – debtor may have an objection, file an appeal, file bankruptcy, etc

  • Legal Risk Part II: Did the Plaintiff complete the foreclosure properly? Were all inferior lienholders named Defendants?

  • Interest Rate Risk: Some investors use borrowed money to buy at auction, this can be a problem when a foreclosure sale is reversed because the money is tied up sometimes for months with no return on the investment


Important legal doctrines and seminal cases that affect auctions
Important Legal Doctrines and Seminal Cases that Affect Auctions

Redemption

  • F.S. Section 45.0315

  • Anytime before the filing of the Certificate of Sale by the mortgagor OR ANY SUBORDINATE INTEREST

  • A Reinstatement is NOT the same, but Judges often confuse the two and many times we see Judges give the Debtors a break


Important legal doctrines and seminal cases that affect auctions continued
Important Legal Doctrines and Seminal Cases that Affect Auctions……..continued

When can a foreclosure sale be reversed?

Two Prong Test from Arlt v. Buchanan, 190 So. 2d 575 (1966), established the doctrine that the foreclosure sale must have had (1) an inadequacy of price and (2) an irregularity at the sale.

“The general rule is, of course, that standing alone mere inadequacy of price is not a ground for setting aside a judicial sale. But where the inadequacy is gross and is shown to result from any mistake, accident, surprise, fraud, misconduct or irregularity upon the part of either the purchaser or other person connected with the sale, with resulting injustice to the complaining party, equity will act to prevent the wrong result.”


Important legal doctrines and seminal cases that affect auctions continued1
Important Legal Doctrines and Seminal Cases that Affect Auctions……..continued

  • Arsali is currently before the Supreme Court and it might change the Arlt v. Buchanan 2 Prong Test Rule, 4D11-2348 and SC12-600

  • Facts of Arsali

    • 4DCA affirmed the reversal of a foreclosure sale where value was not at issue (so just 1 prong was considered) – in this case the bank had failed to cancel the foreclosure sale even though they had agreed to so if the debtor reinstated which the debtor did

    • The property sold for $125,300; the judgment was only $86,979.93

    • The debtor filed an objection to sale and won; the third party purchaser appealed

  • The Supreme Court is presently considering the following question:

    • DOES THE TEST SET FORTH IN ARLT V. BUCHANAN FOR VACATING A FORECLOSURE SALE APPLY WHEN ADEQUACY OF THE BID PRICE IS NOT AT ISSUE?


Common mistakes by investors who buy at auction
Common Mistakes by Investors who Buy at Auction Auctions……..

  • Getting into a bidding war and paying too much

  • Not pulling title and buying the wrong lien position

  • Not doing a drive by and losing money on the property rehab

  • Not doing proper due diligence on value and paying too much

  • Not doing proper due diligence on the case and getting dragged into a re-foreclosure or extended lawsuit


Most common legal work related to auctions
Most Common Legal Work Related to Auctions Auctions……..

  • Title searches

  • Lien searches

  • Defending against an objection to sale

  • Completing a writ of possession

  • Going into a Bankruptcy case to obtain relief from stay to get possession

  • File a motion to get money back

  • Re-foreclosure of an unnamed inferior lienholder

  • Negotiate with Condo Associations to lower the bill upon taking title – F.S. 718.116 is pretty clear “joint and severally liable with prior debtor on assessments”


Conclusion
Conclusion Auctions……..

There are approximately 400,000 open foreclosure cases across the State of Florida

There are approximately 400,000 more mortgages that are delinquent but not in foreclosure yet

These numbers translate to a 3 to 5 years supply of foreclosure auctions so there is plenty of work to still do in this space


Erik Auctions……..Wesoloski, Esq.

Wesoloski Carlson, P.A.

848 Brickell Avenue, Suite 300

Miami, Florida 33131

Tel 305-329-1000

Fax 305-532-7804

[email protected]


ad