Foreclosure sales can get interesting
Monday, November 30, 2009
Ever wonder what becomes of all those houses sold in foreclosures?
Here is a fascinating story about one sale of 57 prime acres outside Sacramento worth millions, auctioned for the paltry sum of $2,000. As the Sacramento Bee reports, numerous courts upheld the sale.
But here’s another case affirmed by a California appellate court in which a buyer who thought he was getting a windfall lost out.
JP Morgan Chase Bank held the paper on a piece of residential property on Arcola Avenue in Sacramento, valued at $382,000. When it was put up for auction, the auctioneer made a mistake and read from a script for a piece of property across town worth $51,500.
The sole bidder, Millenium Rock Mortgage, bid $51,500 for the more valuable property.
The auctioneer accepted Millennium’s bid, but later in the day realized the mistake, and declared the sale invalid. In response to a suit by Millenium, Superior Court Judge Loren McMaster of Sacramento County upheld the sale, concluding that the “clerical error” was not the “irregularity” was not significant and should not invalidate the sale.
The California Court of Appeal disagreed in an opinion by Justice M. Kathleen Butz. Butz concluded that the clerical error allowed Millennium to pay a “grossly inadequate price” that went to the “heart of the sale.” The court ruled that to allow Millennium to acquire the property for one-seventh of the price would deprive the seller and give Millennium an undeserved windfall. Millennium Rock Mortgage, INC., v. T.D. Service Company, Court of Appeal 3rd District (C059875)
Category: Appellate Reports;