Here’s an interesting item; With rising home prices in many metros across the country, a trend is developing where foreclosed homes are fetching far more than was originally owed by the former owner, thereby producing a surplus at the home’s auction (after all debts/liens have been resolved). This surplus, if any, is supposed to be returned to the original mortgage holder. Realtor.com is reporting that up to 80% of foreclosure auctions in Denver County, Colorado end up with surpluses after being sold at auction – resulting in nearly $1.5 million in uncollected surpluses from about 50 foreclosed homes.
“The steady rise in home prices in metros like Denver and Seattle has made it more difficult for investors to find inexpensive properties they can fix and flip for a profit. And that’s why the competition is becoming so fierce at the foreclosure auctions. As the economy has improved, there are fewer foreclosures, tightening the market even further.”