Bank wants to reverse sheriff sale

[rstemen]

What is the name of your state (only U.S. law)? Ohio
Here's an interesting question. 35 days ago I went to a sheriff sale to bid on a home. I was the only one bidding against the bank and they bid in $10K increments, kind of unusual it seemed. Now, 35 days later, the bank has filed a motion to vacate stating that the bank had reached agreement with the owner, but too late to cancel the sale, so they want to "reverse" the sale. Just curious if that is legal?

 

[Ohiogal]

What is the name of your state (only U.S. law)? Ohio
Here's an interesting question. 35 days ago I went to a sheriff sale to bid on a home. I was the only one bidding against the bank and they bid in $10K increments, kind of unusual it seemed. Now, 35 days later, the bank has filed a motion to vacate stating that the bank had reached agreement with the owner, but too late to cancel the sale, so they want to "reverse" the sale. Just curious if that is legal?

Did you buy the house?

 

[rstemen]

No, sorry, I wasn't clear, the bank outbid me.

 

[Just Blue]

No, sorry, I wasn't clear, the bank outbid me.

Ahhh...So this really has nothing to do with you?

Hire an attorney to deal with the curiosity factor.

 

[rstemen]

Ahhh...So this really has nothing to do with you?

Hire an attorney to deal with the curiosity factor.

Well, the only thing it had to do with me was I bid on the property in good faith and invested time and research prior. It seems the auction was a farce as the bank and debtor had an "arrangement" prior to the auction.

 

[TigerD]

Well, the only thing it had to do with me was I bid on the property in good faith and invested time and research prior. It seems the auction was a farce as the bank and debtor had an "arrangement" prior to the auction.

And that is why the bank needed to outbid you.

DC

 

[quincy]

Well, the only thing it had to do with me was I bid on the property in good faith and invested time and research prior. It seems the auction was a farce as the bank and debtor had an "arrangement" prior to the auction.

A bank often bids on the foreclosed property at the sheriff's auction. Bids on a foreclosed home can often fall short of what is owing on the home and the bank may prefer not to take a loss.

After the auction, the original homeowner has the opportunity to buy the home back, by paying the price bid at auction (and, if the bank is the high bidder, the costs incurred by the bank). This is called the "redemption period" - the time allowed for the homeowner to repurchase the home.

There does not have to be an "arrangement" between the bank and the homeowner for the homeowner to regain ownership of the home. It is just part of the foreclosure process.

 

[rstemen]

A bank often bids on their own bank-owned property at the sheriff's auction. Bids on a foreclosed home can often fall short of what is owing on the home and the bank may prefer not to take a loss. After the auction, the original homeowner has the opportunity to buy the home back, by paying the price bid at auction (and the costs incurred by the bank). This is called the "redemption period."

There does not have to be an "arrangement" between the bank and the homeowner for the homeowner to regain ownership of the home. It is just part of the foreclosure process.

Oh, thanks for the info. Strange that the bank needed a motion to vacate the sheriff sale eh?

 

[quincy]

Oh, thanks for the info. Strange that the bank needed a motion to vacate the sheriff sale eh?

This does not mean that the auction was a farce. It could just mean that the bank prefers to work something out with the original homeowner instead of having to go to the trouble and expense of marketing the home itself.

It is possible that, if your bid had been high enough, you would now be the new owner.

For more information, here is an Ohio Bar Association link: https://www.ohiobar.org/forpublic/resources/lawyoucanuse/pages/lawyoucanuse-148.aspx

 

[OK-LL]

After the auction, the original homeowner has the opportunity to buy the home back, by paying the price bid at auction (and, if the bank is the high bidder, the costs incurred by the bank). This is called the "redemption period" - the time allowed for the homeowner to repurchase the home.

I don't believe the original homeowner is allowed to pay only the price bid at auction to redeem the property--I've been involved in hundreds of foreclosures and if the owner wants to redeem the property after sale, but before the confirmation of sale by the court, he has to pay the full amount owed to the lender, including attorney fees & costs of the foreclosure. Perhaps this is state-specific, but I doubt it.

For the OP, the original homeowner has the absolute right to redeem the property before or during the confirmation of sale hearing; after the sale is confirmed, the original homeowner has no further right of redemption.

 

[quincy]

I don't believe the original homeowner is allowed to pay only the price bid at auction to redeem the property--I've been involved in hundreds of foreclosures and if the owner wants to redeem the property after sale, but before the confirmation of sale by the court, he has to pay the full amount owed to the lender, including attorney fees & costs of the foreclosure. Perhaps this is state-specific, but I doubt it.

For the OP, the original homeowner has the absolute right to redeem the property before or during the confirmation of sale hearing; after the sale is confirmed, the original homeowner has no further right of redemption.

Right. I sort of said that, didn't I? At any rate, the link I provided says that.

The prices bid at auction will generally be the same as, or greater than, the balance owing on the loan plus bank costs, because the starting bid will be set at the amount owing on the loan plus costs. When the loan balance is high, the house often attracts no bidders at auction (as many buyers at auctions are looking for cheap houses to fix up and flip) so the bank will purchase the house and then turn around and sell it, adding to the selling price any additional realtor costs and costs required to fix up the foreclosed home to get it sale-ready.

Very few people who lived in the foreclosed homes will be able to raise the money to pay the balance owing. Many foreclosed homes, therefore, will become bank-owned properties that are sold below market-value, to unload them as quickly as possible. When there are a lot of bank-owned properties on the market with the lower-than-market prices, this affects adversely the prices homeowners of non-foreclosed homes can get for their houses.