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This is what is called a "zombie" house. The debtor has discharged their debt and mistakenly believes a foreclosure simultaneously occurred and that they are off the hook. They are only off the hook for paying the mortgage, but not off the hook for preserving the asset and paying HOA fees until the property is foreclosed or transferred in a sale. If the Public Trustee (not BK Trustee) is having a sale, check out the auction rules. If the home owner would list their property with a realtor, a sale could be initiated through Equator. Otherwise, you will have a tough time convincing a homeowner to get involved in short selling the property. The lender will require a 3rd party (realtor or attorney) to initiate the sale. Each state's real property laws are different, and it would be wise to speak to the attorney that filed the BK for the owner and see if they have any ideas. Sellers are cautious, and often frightened, about renewing a possible liability on those old mortgages. This is not legal advice, but advice to seek out an attorney for counsel.
You can follow the foreclosure information by reading the entire forclosure file at the clerk of the court. If it was remitted to BK court then it may be cross referenced there with the case number. Again, you can gain the actual information about the BK from its clerk of court and records. THis should direct you if you want ot go through the trouble.....
I agree that if you are "set" on this property, that you should probably pay the $75 or whatever for a current title search (open a closing agent file and have escrow ready). If I recall, NJ is an attorney required RE sales state, so I am lost there as to any advice. Then have your RE agent do a complete work up of BPO. Remember there WILL be unknown conditions in the property and its value is much lower than say a well maintained house with a low mortgage or no martgage that is being sold (full fair market of top product). My point is that your agent should be using SIMILAR distressed properties in the locality of the subject property. THis is science and art and a lot of research. to do this well, one needs to look back up to 9 months or a year for trends, and then 6 months then three, for current values. Banks gernerally want 3 months or less now, but choosing the houses and justification is very important. Make sure the subdivisions are very close by and truly comparable in socio economic and in actual property builds and lots etc...if you KNOW a comparative property is not in that place then reject it!!!!
Do your own research and if you like even talk directly to the tax assessor or tax appraiser regarding sales and values in different forms of distress. The are usually willing to be helpful. You can use combinations of non-distressed and distressed property in evaluation....just be sure and properly weight them as well!.
Remember to NOT approach the owner yourself! you want an agent that has researched values and has arrived and a "high/low" of values you agree with to offer the owner in sale contract. You want to keep this "arms length" for many reasons, the least of which is not taxable value for ad valorem taxes later.
I will make a reccomendation, that you evaluate how much your time, effort, energy, and up front costs should be valued at in thousands of dollars. The point being that if the note holder expects to get full undistresssed values for this property then why would you go through this process, use yoru time and effort, and purchase a property of known lesser value and in distress. If they can't meet your expectations of "return on investment of time and personal costs and emotional rolloer coastering (that the HOLDER will put ou through)" then be willing to walk....and if you want even re-submit again (with new comps) after the file closes....but don't go over your reasonable value....
I expect this property is stuck in the black hole of WF BK properties. I also expect the owner still owns it subject to the BK. It's probably not high on WF's radar and it will sit there a while longer. If you know a Realtor, ask them to do a Title Search to see who is the current owner - I'll bet it's the original owner and not WF. Ask your Realtor to write a Fair Market offer and present to the owner. Get that offer accepted and then proceed to a short sale subject to BK court. You have a better chance at this method than at the Auction.
Exactly what I would say Deborah. Probably be tough, but good luck!
If the property was lost in BK the BK trustee will be the one who is liquidating assets to pay off creditors. The owner would still need to sign the deed if the property is still in her name although the BK trustee would be negotiating terms. However if there is still a WF lien on the property, unless you are paying full payoff they would still need to approve a short sale.
Find out where the trustee's auction is held in the community where the property is held. Take cashiers check and bid at the auction. Sign up for auction notifications (online) with the various auction entities. (Around my area it's williamsauction.com or HudsonMarshall.com) You'll be bidding against the big guys (investors)...you MAY get it at the auction. Good Luck!