I am interested in an REO in California. I’m not certain what the relationship is between the original lender and Deutsche Bank, but DB is the owner of record having been the foreclosing beneficiary who “paid” for the house at the trustee’s sale. In any event, there is no evidence of any effort or legal action to remove the prior owner from the premises, which as I understand it must occur before the property can be listed or resold.
Nor is there any evidence in county records of the former owner initiating action to fight the foreclosure or eventual eviction. I do know he bought the place for under $100K in 2000, did a cash out re-fi for $265K in 2007, and by all appearances defaulted almost immediately and has been living off the money from the re-fi, since it’s obvious that money did not get put back into the house.
I would think the bank would move quickly so as to minimize the occupant’s opportunity to trash the place any further - we’ve seen a number of places around here with all plumbing and wiring literally ripped out of the walls.
I’m working with the realtor who will eventually be the listing agent, and he is unable to offer any additional information, saying only that there’s no way to tell how long it will take. From everything else I’ve read as well as conversations with both the county clerk of courts and the sheriff’s department civil office, the time from start to finish of eviction proceedings can be as little as 35 days - 30 to get through the court system and 5 once a court order is handed down.
My question is what’s the holdup here? Why on earth would DB want to risk even further erosion of the value of the asset in a declining market with an occupant who can only do them harm? Is there anything at all I can do to learn more about the current status and potential timeline? For that matter, is there anything I can do to influence DB to speed up that timeline?
Hi Scott,
Although the bank will typically contact an owner to negotiate a move out date. If the occupant is the owner then the bank could start the formal eviction within days if they cannot negotiate a cash for keys agreement to vacate the property by a certain date. If the lender is forced to formally evict the owner and the owner answers the complaint that could extend the length of time it is taking to evict them. If the owner files BK that could further delay the eviction.
If there are tenants in the property then the lender would be required to give them a 90 day notice if on a month to month agreement or honor the terms of the remainder of the lease if there is a legitimate lease in place.
There could be a variety of reasons why the tenants are still occupying the property.
Thanks much for the response. I should have mentioned in my original post that the current occupant is (or rather was) the owner. I have literally checked every conceivable department within our county and there is no record or other indicator of recent or current civil or criminal action involving this individual, other than the foreclosure itself. No BK or other defensive move by the occupant, and no move to evict by the lender.
It really does look like the occupant is just dug in and doesn’t intend to budge until forced to do so. I’m just scratching my head over why the lender isn’t making a move since the ball is clearly in their court and the risk of further damage to the property escalates with each passing day.
Hi Scott, It is really hard to tell. The lender could be selling or transferring the loan to another servicer or performing some curative title work. In some cases the lender (usually Fannie or Freddie) may even lease the property to the former owner. I have personally talked to some homeowners that have not heard from the lender months after the property went back to the bank.