Foreclosure auction deals? Not these days
After hearing that a customer of his Alachua auto electrical shop was losing
his house in foreclosure, Kenneth Polk thought he would buy it and other
houses for a bargain at foreclosure auctions and rent them out as cheap
housing for people in need.
But he learned what former bargain hunters already knew: There are no longer
any deals at foreclosure auctions.
That's because banks bid up to the amount of what they are owed on the
mortgage, plus attorney's fees and other expenses of the foreclosure
process. More and more often, that amount is more than the house itself is
worth because of declining home values.
The banks do not have to pay themselves for the high bid. The only cost is
the document stamp fee on the title that is a percentage of the final bid.
Once a bank does own the home outright, it goes on the market like any other
home for sale so the bank can get its money back.
Posted: 23 March 2009
Source: The Gainesville Sun
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