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Does Private Mortgage Insurance cove foreclosed homes?

Questions on foreclosed homes

1) If PMI insurance does not cover the deficiency amount owed on the home then does the bank sell the property for the deficiency amount owed, or the asset value of the house and property?

2) Are there any website/places someone can go to bid on a house without other mortgage brokers or realtors bidding on it too?

3). If there is only $20,000left owed on a house and that’s the only amount the bank is losing why not sell the house as is but maybe add on another 5 or 10 thousand dollars to the closing cost for the bank to still make a profit.

4). When the banks pay someone to fix up a house before selling it, do they shop around for competitive estimates for repairs or check behind the contractors to see if the work is done correctly and to code ?

5). If a bank knows they do not want to sell a house for no less than $50,000 at an action then why does the bank not have the starting bidding closer to 50,000 instead of $10,000?

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    Sep 29 2012: I can give you my non-expert impression on your questions four and five. It is possible that a place like HUD can give you authoritative answers to all your questions.

    Banks want repairs to be done at competitive prices. As they often are nowhere near the houses that come to them through foreclosure, they often retain local agents to arrange for repairs through competitive contract. The agent then is expected to verify that the work was done adequately.

    When in bidding situations the seller of the item sets a starting price, they will often choose a price that seems like a good deal to generate lots of bidding activity. Those who sell at auction or who sell lots of real estate need to develop an instinct for where to start bidding in order ultimately to get the highest price they can for the property.

    Here is a link that begins to respond to your second question. It looks like certain HUD properties are made available for the opening ten days of bidding only to owner-occupier bidders rather than to investors. If after ten days they do not get an acceptable offer from an owner occupier, they open the bidding to anyone who cares to bid, including investors.

    What they are probably trying to do by this strategy is to give reasonable bids from potential owner occupiers the first priority but they are not going to accept a way, way below market rate bid from anyone.