I am researching purchasing a home at foreclosure auction with liens and a 2nd mortgage
Final Judgment Amount: $106,300
Plaintiff Max Bid: $106,300
Some Hoa's showing up as liens and some are SAT.
There was a larger first mortgage prior @ $285,00 which was apparently assigned to the current plaintiff??? Just guessing on that. What are the possible downsides?
It is risky to purchase a home at a foreclosure auction without having an attorney review the court file to determine that the foreclosure was properly performed, that all appropriate persons who may have a lien or mortgage against the property have been properly served, etc. Any that the foreclosing attorney has missed are not foreclosed in the proceeding. What you describe here is a second mortgage holder who, in order to protect its own junior position, has apparently acquired ownership of the first mortgage by purchasing that mortgage or paying it off. It is unclear which mortgage is being foreclosed then by the plaintiff, the larger one or the second one, or both simultaneously? You should get copies of the entire foreclosure file and take it to a real estate attorney to review the proceedings and seek advice as to whether the property has clear title if you are the successful bidder at the auction. Otherwise, you may be acquiring a property which will have a clouded title and you could end up having to deal with quiet title actions and things of that nature, which you undoubtedly wish to avoid. There is nothing wrong with buying property at auction, as long as you study the quality of the title and the adequacy of the foreclosure proceedings as conducted by the foreclosing plaintiff's attorney. Unfortunately, in the past three years we have seen many foreclosure actions with defective service of process, technical deficiencies of various kinds, and often the overlooking of service upon necessary and essential parties to the foreclosure action.
If you buy in a short sale or any other type of sale other then a tax lien you take the property subject to existing liens (i.e. they have to be paid as well as your purchase price).
Here are some Quick Facts about Foreclosure in Florida:
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: No
Primary Security Instruments: Mortgage
Timeline: Typically 180 days
Right of Redemption: Yes
Deficiency Judgments Allowed: Yes
In Florida, all mortgages are foreclosed in equity. In a mortgage foreclosure action, the court severs, for separate trial, all counterclaims against the foreclosing lender. The foreclosure claim shall, if tried, be tried to the court without a jury.
The court order of foreclosure will specify how the foreclosure must take place, and the foreclosure must take place on those terms. Whenever a legal advertisement, publication, or notice relating to a foreclosure proceeding is required to be placed in a newspaper, it is the responsibility of the lender or their representative to place such advertisement, publication, or notice.
Equitable Right of Redemption ends at the foreclosure sale (or at another time specified by the courts, but this rarely happens). There is a period of time after the sale that "the court reviews the sale to ensure a fair price has been paid." Basically, this period of time allows parties to object to the sale on the basis that proper procedures were not followed or collusion existed between the bidders, for example. This period is usually 10 days, after which the Certificate of Sale is filed and title passes, if the sale is confirmed. If the sale is not confirmed, another sale is ordered. (Reference F.S. Chapter 702)
The lender may sue to obtain a deficiency judgment in Florida.
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Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States.