In Some Cases, Owners Do Not Want Foreclosure Auction Delay
In contrast to many other distressed homeowners who want to prevent their houses from being included in any foreclosure auction, sisters Linda DeCiccio and Brenda Holder want more than anything else to complete the sale of their late father’s home in Johnston, Rhode Island in a foreclosure auction.
The sisters claim that each day of delay in the foreclosure auction proceedings will cut down a portion from what they can get from the sale of their late father’s house. If the house is sold at a price lower than their father’s reverse mortgage loan, they will get nothing.
A reverse mortgage loan is typically offered to a homeowner aged 62 or older who wants to enjoy his home equity while he is still living. This loan becomes payable when he sells the home or dies.
DeCiccio and Holder’s father took out a reverse mortgage loan amounting to $196,930.
When he died in January last year, the sisters failed to sell the house to pay the loan. They requested their father’s lender, Bank of America, to give them more time to find a buyer, but despite the mid-century modern design and furnishings of the house, they were not able to sell the house.
Now as they realize the increasing interests and fees accruing on their father’s loan, they now want to speed up the sale of the house in a foreclosure auction.
The foreclosure auction was scheduled by the lender and the sisters arrived early to attend the auction. There were three bidders for the property, two of which were known to the sisters because they had made previous inquiries on the property.
But to the sisters and bidders’ frustration, Bank of America did not send any representative or any information regarding the cancellation of the auction.
Later, the sisters learned that the bank had a title-related problem involving their late mother. But the sisters complained that the bank was just trying to make more money with the property by allowing the interests and fees to accrue.
They explained that the bank would not lose anything from any drop in price because their father’s loan was insured by HUD. Any difference in the loan balance and the selling price would be covered by the HUD insurance.
Holder said that her late father’s loan balance has probably increased to more than $300,000. When the house was assessed last fall, it was valued at $326,100.
As the foreclosure auction is delayed, it becomes more probable that the house would be sold at a price lower than the mortgage loan balance. In that case, the sisters would get nothing.
