Web Based Auctions, Buyer Beware!, Realtor Beware!
Attorneys across the country who share the passion to level the playing field between struggling homeowners and mortgage companies often network and discuss market trends, new strategies to defend against foreclosure, and the latest lender tactics. Among the latest chilling experiments by the mortgage industry many stretch the concept of an auction in ways that our original foreclosure laws were not really drafted to allow. Just as they are with utterly one-sided REO contracts, State Code and other protections for homeowners and even buyers in these situations are all but eliminated! Legal advice in the process of losing or protecting those rights will be implied to someone!
While the lenders do not primarily mean to trample legal rights, their efforts to stimulate higher bid prices on auctions do just that. The end result is that what once were considered final sales, i.e., “the gavel dropped” now bring no closure at all. Many foreclosures and short sale approvals are contingent upon an additional period of time (generally at least 10 days) during which electronic bids by unseen parties can topple legitimate local offers. Large deposits are tied up for days! Other opportunities are lost. It is not enough that lenders require BPOs (broker price opinions) and weeks of analysis before accepting offers on short sales, now in an expression of additional paranoia, they troll the mysterious seas of the internet (or is it just a limited group of privileged bank insiders?) for higher bids after the traditional auction. I will leave for another day a deeper discussion of the depressing effect such tactics have on the traditional bidding processes.
Short Sale Attorney Elizabeth Kayser raises a red flag over one such specific scheme in her blog and the additional peril posed to real estate agents in her blog :
Short sales on Auction site –