Hi,
I??? am new to this. What does the “published bid” mean regarding auction properties??? Is that what is owed/debt against the property??
Hi Jeanne,
The ‘published bid’ is the amount that is owed by the borrower on an ‘in default’ loan that has transitioned from pre-foreclosure (notice of default - NOD) to the notice of trustee sale (NTS) stage. When the trustee files (records) the notice of trustee sale (NTS) for the lender, the legalese in the NTS will include the ‘published bid.’ This is the $ amount owed at the time the NTS is filed. The lender/trustee could put the loan up for sale (trustee sale) at the ‘full debt’ owed at the time the trustee sale in eventually held. That ‘full debt’ amount is often a bit more than the ‘published bid’ as typically the borrower continues to miss payments and the debt thereby grows. There are also plenty of instances when the lender will opt to put the loan up for sale (‘opening bid’ at trustee sale) at a discount below the full debt that is owed.** If** the ‘opening bid’ is discounted, this is most commonly done to entice bidding interest from 3rd party investors who might take the property ‘off the hands’ of the lender. Once a 3rd party investor buys the loan (deed of trust) they will get a trustee’s deed upon sale (TDUS). Once the 3rd party records that TDUS, they are the new owner of the property with the very important caveat that they must be responsible for (payoff/bring-current) any loan/lien that is ‘senior to’ (by recording date or subordination agreement) the loan (DOT) they just acquired at the trustee sale. If no 3rd party bids (at trustee sale), the property goes ‘bank-owned.’
? ?Technically, the lender can publish an amount figure that is less than what is owed. ?That is almost never done - but may be done by a lender to encourage speculators to bid on a property the lender doesn’t want. ? ?Another reason might be if the lender thinks there might be an argument with the borrower over the amount owed. ? ? ?