FLS List and Unpaid Interest

[Neal Lober]

George,

I just finished watching your Texas Foreclosures class online and have a brief question. I'm trying to determine what the bank's opening bid will be on a property that is going to the auction tomorrow. If the FLS report shows that the estimated unpaid balance of the home is $500k and I know that the default occurred exactly 6 payments ago, would I assume that the opening bid would be $500k + 6 month's interest?

Thanks!

[Dolores Tofel]

It would also depend on how long the owner had been paying on the loan. There might be some amortization. Do you have $500,000 cash??? If so, I would love to meet you. :)

[George Roddy, Jr.]

Neal,

Typically, the FLS report has already built the 6 months of payment into the "estimated unpaid balance". As you know, because Texas is a non-disclosure state, FLS has know idea if the owner is 6 months or 12 months behind. There are several other items that comes into determining what the unpaid balance, like property taxes. Even though the owner stops making payment, most lenders will go ahead and advance the taxes regardless.

Thanks for the questions, I hope this helps.


George Roddy