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It's bad enough that a Riverview condominium association is still working through foreclosures on its property, but now it has a new problem: auction hijackers.
Jonathan Ellis, an attorney with Shumaker Loop & Kendrick, says the Eagle Palms association he represents can't clear its books on foreclosures because fake bidders are botching court-ordered sales.
Bidders, he says in a release, are paying an initial fee to participate in a foreclosure auction, but then never follow through with the property purchase. Eagle Palms had put several properties up for auction online, finding successful bidders who quickly paid quitclaim deed fees and a 5% deposit on the purchase price.
Those bidders then put renters in the unit, collecting first month's rent and a security deposit, Ellis says. But when it comes time to pay the rest of the condo's purchase price, those bidders back out.
The renters, Ellis adds, often don't even know they're living in a foreclosed unit. “They think they were just subletting the property from a legitimate company,” he says.
Ellis has tried to track down the fake bidders, but he instead finds fake names and addresses that are either outright wrong, or lead to mailbox centers with no record of an owner.
What's the best way to avoid this new practice? Ellis suggests a live auction, not an online one. Bidders are then required to show up and make payments.
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