Following multiple postponed foreclosure auctions over the past three months, the La Habra, Calif., home where “Octomom” Nadya Suleman lives was foreclosed on yesterday.
View the Octomom foreclosure on RealtyTrac.
The property is now a bank-owned REO (real estate owned by the lender). The lender listed on the original Notice of Default that started the foreclosure process back in December was TRT Home Loans.
Although it took about six months to complete the foreclosure process — including several auction postponements — that is actually well below the average time to foreclose in California of more than 10 months.
The lender appeared to be eager to avoid foreclosing on the property. The opening bid set at the real estate auction was $355,643, more than $100,000 below the foreclosure judgment amount of $477,288 that the lender claimed was owed to them and nearly $200,000 below the property’s estimated market value of $547,735.
After it was originally scheduled for a foreclosure auction on March 29, the property was listed for sale with an asking price of $425,000, which by definition would have been a short sale if it sold for less than what was owed on the mortgage.
But no buyers or investors stepped up to purchase that potential short sale bargain back then, and none stepped up at the foreclosure auction yesterday, leaving the lender holding the hot potato. Under normal circumstances, the next step for the lender would be to evict the current tenants, Suleman and her 14 children.
The owner listed on the NOD was not Suleman, but Amer Haddadin, who reportedly sold the property to Suleman’s father three years ago for $115,000 down and a $450,000 promissory note. Haddadin claimed to be unable to make the mortgage payments because Suleman was not making the agreed-upon payments on the promissory note.
It remains to be seen how the lender may handle this touchy situation, especially given the trend toward allowing distressed homeowners to stay in their former properties as renters in exchange for the deed to the home. Bank of America recently announced a test “deed-for-lease” program for about 1,7000 foreclosed homeowners in California, Arizona, Nevada and New York.
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