What are considerations when formulating a bid strategy for foreclosing lenders?
Many factors should be considered when deciding on how much to bid. Of prime importance is the fact that the plaintiff is entitled to bid at the sale an amount equal to the amount due the plaintiff under the judgment, plus interest (calculated per diem) and costs through the date of sale. Any bid by the plaintiff in excess of this amount must be paid to the clerk, in cash or acceptable substitute, the same as any other person’s bid. Lenders should give counsel attending the sale specific bidding instructions. Prudent considerations for the lender include: a) the fair market value of the property; b) the amount at which the lender would prefer to receive cash as opposed to the property; c) the Durrett rule which essentially required bids to be 70% of fair market value to avoid fraudulent transfer in subsequent bankruptcy issues; d) unpaid property taxes and any other superior liens against the property; e) tax lien redemption rights; f) the fact that a full judgment bid will preclude a
