Question - First Franklin/FDIC opening bid


#1

I am looking at a property that is supposed to be sold next week at the courthouse steps.? The indicated opening bid today on foreclosure radar is the balance of the first loan.? There is also a second on the property.
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Both loans are from First Franklin Financial Corp. which is now under FDIC ownership.? Do you know if the FDIC is lowering the opening bid to a realistic amount or are they sticking with the balance of the first and making it an REO?
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It would be good know before I spend a whole bunch of time getting ready and arrange funds from friends/family.? This would be an owner occupied situation and not an investment property.
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Thanks for all your insights Sean.
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J.S. in San Diego.


#2

Hi J.S.
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I usually don’t recommend that individuals buy at the auction due to the all cash requirement, no title insurance, no inspections, etc.
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The other thing that can be really frustrating for someone trying to buy one house is that you almost never know when or if it is going to go to sale, and if it does at what discount.
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I can tell you that nearly all properties are discounted, and most below market value. We estimate the average discount below market to be around 10%, with the pro’s usually getting discounts of 20-40% (despite claims from other websites 50% off of current market almost never happens). To get those discounts the pro’s look at a lot of houses for each 1 house they buy. Just part of the deal.
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If you really want to pursue this particular house, please, please, carefully do your homework. Make sure you understand the terms of the sale (you need to know what “subject to liens and encumbrances” means). And independently verify title information rather than just relying on our estimates (be sure you read our disclaimer above the transaction history).
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Finally, please feel free to ask additional questions.


#3

I am sitting here in my state wondering if I want to bother purchasing an assignment of a 2nd mortgage owned by First Franklin (FF). I hate dealing with loss mitigation and I am certain FF will not redeem. The 1st discounted their bid thus making the decision buying it from the owner or buying 2nd and redeeming upon expiration of owners redemption. I have not seen FF redeem on a 2nd mortgage in years and I would be stunned if the foreclosing lender bid in what was owed on both notes. Id goto that sale if the owners are hard to deal with.


#4

We rarely see 2nds attempt to protect their position in CA. I do know some short sale investors who are out buying notes to control deals, but it has always seemed easier to me to just let the 1st foreclose and buy that at auction.