I've experienced my first mortgagee sale process. I'm glad I didn't win.
Before I get into details, I have a legislation question. Should we require the mortgage holder to provide a clear title? For non-renters, homes that are owner occupied, should the mortgage holder be required to provide vacant occupancy? (I'm not talking about a rental property.)
Mortgage companies seem to be pushing all legal responsibilities onto the seller, which seem to me to be unfair.
Unless I'm mistaken, you could spend months in a legal battle to get a clear title, then another legal battle to get vacancy. Meanwhile the occupants could tear out all the copper piping / wires, and take a sledgehammer to the house with a legal recourse.
Back to my first and only experience with a mortgagee sale, I must say I was relieved I didn't actually get past the "expression of interest" stage, because there were 17 offers, and 3 were more than mine. I offered 3/4 of the QV value.
Overtime I learned the history of this sale.
The real estate agent went onto the property asking for interior shots. A burly man made it clear he should leave, and would not even let him even look in the front door.
After the ad was posted on TradeMe only from the outside, no interior shots, no open homes. There was an ancient blueprint, and 5 exterior photographs, only from the front and the road.
I saw the ad and address. The front gate was open, and there was no "no trespassing sign." I went onto the property myself. No one answered the door. I noticed piles of furniture were used to barricade the backyard, and were covered with piles of yard waste. They had obviously been barricaded some time ago.
Judging by the curtains, it looks like items were piled against the interior windows.
I won't go into the details, but I heard a rumour a notice was served in January, and the 50 year old women appeared mentally unstable.
Another rumour was the daughter had gotten power of attorney over her mother affairs, and was selling the home despite her mother's objections.
I made a second visit to the property, only the find the front gate was tied closed with medical bandages, the "for sale" sign had been removed, and a "sold" sign put up. As mentioned the house is now in the second stage, the formal offer stage. I didn't get this far.
The real estate agent said he knew about the "sold" sign, but the owner was within their legal rights. Considering there were 17 offers, obviously this ploy didn't work.
An ugly affair.
The mortgage company first asked for expressions of interest, and asked for conditions. I required a clear title and vacant possession.
Near the close date, the mortgage company sent a new version, and struck all conditions, shown below.
Again should we require the mortgage holder to provide a clear title? For non-renters, homes that are owner occupied, should the mortgage holder be required to provide vacant occupancy?