THE BANK AUCTION CYCLE
IMPORTANT STEPS WITH DESIRED OUTCOME
THE BANKING AUCTION is the sale of disputed rights by a credit institution by not receiving the corresponding payment of the property guaranteed in the mortgage agreement.
NON COMPLIANCE
A person defaults on it's mortgage credit payments and refuses to negotiate with their creditor bank.
FAILED MORTGAGE OBLIGATION (definition)
Legally binding guarantee constituted on a asset that is not delivered to the creditor and that gives them the right in case of breach on the guaranteed obligation, to be paid with the value of the asset.
MORTGAGE TRIAL
ENFORCEABLE JUDGMENT
The bank or portfolio manager initiates a Special Mortgage Trial, which can last 1 to 10 years to reach an enforceable judgment.
Enforceable Judgement is the official decision of a court of law in a lawsuit. ... In any case, when a court issues a ruling (through the pointed judge), that ruling becomes legally enforceable and is enacted by the full power of the law.
COMMERCIALIZATION
LEGAL ACTION
We receive the portfolio through our assigned legal advisers and start the commercialization. As soon as we find an investor, the contract for the provision of professional services is signed, which guarantees our legal action.
ASSIGNMENT OF THE RIGHTS
Our legal advisers mediate the commercialization of the collection rights of these mortgage debts (Assignment of Rights) which is signed before a Public Notary.
JUDICIARY
DEED & EVICTION
The appointed team of experienced lawyers will carry out all the necessary legal procedures, proceed them to the judiciary, towards deed and eviction.
FREE OF LEGAL ISSUES
The estimated timeframe is between 8 and 12 months for our appointed legal advisers to deliver the property free of any legal issues and pending procedures.
ASSIGNMENT OF THE RIGHTS
Achieving acquisition of the rights by court ruling (enforceable judgement) but not the property; The property is the guarantee of the courts and with this legal assignment it is guaranteed that you as our client will receive the award of the asset as collateral or the total payment of the value according to the ruling (this happens in less than 10% of all cases).
BANK AUCTION, IS IT FOR ME?
MOTIVES & URGENCY
As long as you do not have the urgency of owning the property right away, since this type of procedures take in average 8 to 12 months to be delivered accordingly.
ADVANTAGES
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Achieving properties 30% to 60% below its value.
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Immediate capital gain upon deed.
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Processes without the risk of losing the investment.
ANY ADDITIONAL ADVANTAGES?
BENEFITS BY BANK AUCTION
Get a healthy return that no other type of investment produces. You can either choose to resell the property rights to make a profit or keep the property as an attractive asset. Remodel and use it for yourself plus your family by living there, sell it for a nice profit or rent it!
POSSIBLE DISADVANTAGE
Not able to inspect the interior of the property during the process, as well the time-frame involved.
WORTH KNOWING
FURTHER COSTS
The final price of the acquisition of properties in the process of bank auction includes all expenses except:
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Payment of Ratification of Assignment of Rights (upon signature)
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Debts of Property, Water and Maintenance (maximum 5 years) - (at the signing of the deed)
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Common expenses of property deed
FREQUENTLY ASKED QUESTIONS
FOR INFORMATIVE DECISION
CAN THIS TYPE OF PROPERTY BE PURCHASED WITH CREDIT?
YES OR NO
Definitely not, unless it is a private loan and the guarantee is not the asset. These properties are in the process of bank auction and still in the legal process, therefore do not yet have deeds so they cannot be subject to collateral.
DO I AUTOMATICALLY PURCHASE THE PROPERTY AS SUCH?
LITIGIOUS RIGHTS & BENEFITS
No, when you buy assignment of litigious rights, the Bank is handing over to you the legal right to collect the debt on its behalf. Therefore, taking the bank's place acquiring all the rights and benefits to continue the lawsuit towards the individual who failed to pay and to receive payment in full of the total debt. In 100% of our cases the debt is greater than the cost of the guarantee, so you are left with the property as payment of this particular debt.
INSPECTION OF THE ASSET?
ACCESS
ARE THE PROPERTIES OCCUPIED?
In most cases, yes.
CAN THE PROPERTY BE SEEN FROM THE INSIDE?
No, these properties are in legal proceedings and are mostly occupied by the debtors. The characteristics are provided by the Bank.
WHAT IF THE DEBTOR DOES NOT WANT TO LEAVE THE PROPERTY?
EVICTION
As soon as the trial is over and the judge signs off the deeds, the order of eviction is given, occupants must now leave the property accordingly. If this does not happen, (1%) appointed legal team with the authorization of the judge, carries out the procedure with the help of the public law enforcement providing legal entering.
DO I NEED A LAWYER TO CONTINUE WITH THE TRIAL?
WHAT'S INCLUDED
It is not necessary for a lawyer to follow the process of the trial, our appointed legal advisers are the ones that work the trial and completes the procedures until obtaining possession of the property (included in the paid fee).
WHEN BUYING THIS TYPE OF PROPERTY, AM I STILL PAYING THE DEBT?
WHO PAYS WHAT
No, you do not pay anything, now it is up to you who the debtor must pay instead of the bank.
WHAT IF THE DEBTOR WANTS TO PAY IN CASH AFTER THE PROCESS?
VIABLE OR NON VIABLE OPTION
As you now occupy the role of the bank, it is your decision if you receive payment or are awarded the property. Remember that the debt equals or exceeds the value of the property, therefore makes it normally a non-viable option for the debtor. In this case the contract provision of services, guarantees full refund of the fee paid.
