How to Bid on Sheriff s Sales. Civil District Court

Transcription

1 How to Bid on Sheriff s Sales Civil District Court

2 Presented by Sheriff Marlin N. Gusman

3 Orleans Parish Sheriff s Office SHERIFF S SALES DISCLAIMER* *This seminar is for information purposes only, and does not constitute legal advice. Images of h0mes are for illustration purposes only.

4 Sheriff s Auction Date: Every Thursday (except legal holidays) Time: Noon Location: Civil District Court 421 Loyola Ave.

5 Types of Sheriff s Sales Seizure Sales Court-Ordered Sales Government Sales

6 Types of Seizures 1. Executory Process A Quick Take legal process for defaulted mortgages. 2. Judgment A court grants a money judgment to plaintiff. No mortgage involved.

7 What A Seizure Sale Does Transfers debtor s ownership interest. If debtor has a good title, you have a good title! Wipes out debtor s inferior liens. Pays off debtor s superior liens. No superior liens in city cases.

8 What A Seizure Sale Doesn t Do Does not ensure clear title. Does not have a warranty as to condition of property. So, view the property first! All city sales will be blighted properties, requiring cleanup, repair or demolition.

9 Why Seizures on Mortgages are Safer for Bidding Failed mortgages generally have title insurance. Bank or mortgage company is usually the plaintiff in seizure sales. Read the title of the case.

10 Why Title Matters in Seizure Sales Lender s (Plaintiff) title research is a good indicator title is good. Exception: There is no lender in city sales.

11 Example 1: Read the Title of the Case

12 The Sheriff s Role in Seizure Sales Sheriff obtains mortgage and conveyance certificates to detect judgments, mortgages, liens, etc., which occurred while debtor owned the property. Excludes issues that occurred before debtor owned property. Sheriff pays out of auction proceeds any superior liens and taxes; and cancels liens inferior to the foreclosed mortgage. Sheriff does not ensure clear title.

13 Due Diligence Definition: Due diligence is the care used to review a property and its title ownership before bidding. Due diligence varies from person to person Minimum due diligence requires bidders not to purchase a property at auction without seeing it in person.

14 Due Diligence: View the Property First PICTURE FROM STREET SIDE A CLOSER LOOK

15 Due Diligence: Rules of Thumb Never, Never, Never buy merely from viewing the pictures. Pictures may be wrong or outdated. Buyers highest bid may dictate degree of due diligence. Bid more = More due diligence. Bid less = Less due diligence.

16 Sheriff s Sales In Sheriff s Sales, there is no redemption period. This includes city blighted property. In Sheriff s Sales, a deed transferring title will be given to the successful bidder upon payment of the full auction bid.

17 Bidding Process at Sheriff s Sales Sheriff s Auction General Rules: 10% down. Balance due within 30 days. All balances to be paid by: Certified Check, Cashier s Check, Or Money Order. NOTE: CASH WILL NOT BE ACCEPTED FOR BALANCE DUE.

18 Bidding at Sheriff s Sales The law allows a creditor to credit bid (not put up a 10% deposit), because creditor already has an interest in the property. A creditor has to right to credit bid as long as the amount of the bid does not exceed what is owed to the creditor.

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20 Bidding at a Sheriff s Sale Auctioneer will occasionally make special announcements. Special announcements serve as warning to the public:

21 Example 1: Special Announcement

22 Example 2: Special Announcement

23 Sheriff s Sales and Exterior Appraisals An exterior appraisal is completed on each foreclosed property that is being sold with appraisal. Exterior appraisals must be received at least 48 hours in advance of the auction and no more than 90 days before the auction.

24 Bidding at Sheriff s Sales What does a sale with appraisal mean? Creditor reserves right to pursue any deficiencies in amount received from debtor. When the sale is with appraisal, the opening bid must be 2/3 of the appraised value. Appraised Value = $100,000 $100,000 x 2/3 = $66, Opening Bid = $66,

25 Bidding at Sheriff s Sales When the sale is without appraisal, the opening bid is the Sheriff s costs plus all superior claims. Without Appraisal, Sheriff s Costs = $3,000* Superior Claims = $20,000* $3,000 + $20,000 = $23,000 Opening Bid = $23,000 * Estimate

26 A word about second sales Visit Click on Civil Matters Foreclosure tab. Check sale date. Will indicate whether it s a second sale. Opening bid = for cost. Opening bid always less than first offering. Amounts may vary.

27 Blighted Property Sales Blight is a legal determination pursuant to R.S. 13:2575. Code Enforcement and Hearings Bureau, (504) City can seize and sell property pursuant to R.S. 13:2575(A)(6). City granted first lien privilege pursuant to R.S. 9:4821(1).

28 City Blighted Property Sales No redemption period as in city taxes. Blighted property sales are seizure sales, but are not foreclosures: No mortgage is foreclosed upon. No proper title search performed by mortgage lender. No borrowed title search for buyer to rely on. Seizure based on judgment.

29 What is FiFa? After some research to determine present property owner, city obtains Writ of Feiri Facias, or FiFa. Definition: a writ authorizing the sheriff to obtain satisfaction of a judgment in debt or damages from the goods and chattels of the defendant. Writs of FiFa are sometimes secured by a mortgage.

30 Bidding on City Blighted Property 10% down. Balance due in 30 days. Cash ( for initial 10% deposit only), Cashier s Check, Money Order, or Certified Check. No personal checks. No corporate checks. Opening bid = 2/3 of appraised value.

31 Bidding on City Blighted Property Opening Bid- 2/3 of appraised value. No opening bid = No sale. Re-offered at second sale within 2 to 3 months.

32 Closing the Deal Items needed to complete the sale: Cash ( for initial 10% deposit only), Cashier s Check, Money Order, or Certified Check. No personal checks for initial 10% deposit, please. Personal checks are accepted to pay the final balance. Successful bidder s information. Name and /or Business Name Address Phone Number Marital Status Social Security Number or Tax ID Number

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34 Documents and Frequently Asked Questions

35 Frequently Asked Questions

36 Other Useful Links on the Site

37 Civil Matters Foreclosure Tab

38 Real Estate Auctions Tab

39 Real Estate Sales List

40 Summary of Sheriff s Sales Seizure Sales Court-Ordered Sales Government Sales Writ of Seizure, always secured by mortgage. Partition Sales (Terms vary) Sales of State Lands (Terms vary) Writ of Feiri Facias, sometimes secured by mortgage. City Sales (based on a judgment) Public Sales out of successions, divorces, and other court cases Releases inferior judgments and liens Does not release inferior judgments Does not release inferior judgments

41 Orleans Parish Sheriff s Office TAX SALES

42 Tax Sales In Orleans Parish, the City of New Orleans conducts its own tax sales. 3-year redemption period. Creates liability for tax purchaser. Lawsuit to quiet title must be filed to gain clear title.

43 Orleans Parish Sheriff s Office FREQUENTLY ASKED QUESTIONS

44 Frequently Asked Questions Is there a redemption period on a city blighted property sale? No. What happens if I bid on the wrong property? DON T! May I write a personal check at a Sheriff s auction? No.

45 Frequently Asked Questions How will I know how much money to bring as a deposit if I don t know the winning bid amount? Bring 10% of what you re prepared to spend. To whom should I make out my cashier s check? Make the check payable to yourself. Can I get change if my cashier s check is higher than 10% at the auction? Yes, but only up to $5,000 on the day of the sale.

46 Frequently Asked Questions (continued) Am I the owner of the property after I put up my 10% at the auction? No, not until the remaining 90% is also paid and the title is transferred to your name. Can I get the property insured after I put up my 10%? Yes, theoretically, but most probably this is accomplished with the help of an independent insurance agent. What about insurance for city blighted property? City seizures are less likely to obtain property/title insurance.

47 Frequently Asked Questions Does a Federal Tax Lien out rank other liens? No, not in the case of foreclosures. But, there is a 180-day redemption period set by the IRS. Does a Federal Tax Lien out rank a city seizure? In city blighted property cases, the answer to be determined.

48 Orleans Parish Sheriff s Office YOUR QUESTIONS?

49 Orleans Parish Sheriff s Office TIPS TO PREVENT FORECLOSURE

50 How to Prevent Foreclosure 1. Pay your mortgage note. 2. Communicate with mortgage holder. 3. Seek forbearance. 4. Contact a lawyer when foreclosure suit is filed. 5. Find a third party to prevent foreclosure sale.