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But why would the lender want to sell at such a discount? Arent they losing out on the remaining value of the loan. They had to pay someone else 137 mil and the

But why would the lender want to sell at such a discount? Arent they losing out on the remaining value of the loan. They had to pay someone else 137 mil and they arent getting that back. That just sounds like internal fraud.

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bruce511 2y ago
If the lender is the buyer (as in this case) they can then do a proper (non auction) sale as a "willing seller". This means they can reduce the risk for the next buyer - which in turn increases the sale amount. It's in the second sale where the loan will be covered. Usually there's an undisclosed reserve amount on the sale (somewhere near the loan value) - having the bank bid is just an alternative reserve mechanism (which may be illegal in some jurisdictions. )
toast0 2y ago
A foreclosure auction is the process by which a borrower in default is relieved of the property. Proceeds will fufill the liens in order of priority, and anything left will go to the borrower. The buyer typically owns the property free and clear of encumberances; there's some details there. In this case, and in the case of many foreclosure auctions, there were no bidders willing to get anywhere close to the outstanding loan ($83M[1]), so the lender won with probably an opening bid, or at least one above any other bidders. Depending on the foreclosure process, the lender may be able to seek further recourse from the borrower in court, or may only be able to take over the property. Regardless, the lender now owns it, and can do a willing sale as bruce511 mentions. Likely this will involve a longer marketting period and an opportunity for due dilligence. [1] https://therealdeal.com/texas/fort-worth/2024/04/05/opal-holdings-faces-1-6m-in-mechanics-liens-in-fort-worth/ https://therealdeal.com/texas/fort-worth/2024/04/05/opal-hol...
aorloff 2y ago
The office buildings are vacant. There is a sea of vacant office buildings as far as the eye can see.

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bruce511 2y ago

If the lender is the buyer (as in this case) they can then do a proper (non auction) sale as a "willing seller". This means they can reduce the risk for the next buyer - which in turn increases the sale amount. It's in the second sale where the loan will be covered. Usually there's an undisclosed reserve amount on the sale (somewhere near the loan value) - having the bank bid is just an alternative reserve mechanism (which may be illegal in some jurisdictions. )

toast0 2y ago

A foreclosure auction is the process by which a borrower in default is relieved of the property. Proceeds will fufill the liens in order of priority, and anything left will go to the borrower. The buyer typically owns the property free and clear of encumberances; there's some details there. In this case, and in the case of many foreclosure auctions, there were no bidders willing to get anywhere close to the outstanding loan ($83M[1]), so the lender won with probably an opening bid, or at least one above any other bidders. Depending on the foreclosure process, the lender may be able to seek further recourse from the borrower in court, or may only be able to take over the property. Regardless, the lender now owns it, and can do a willing sale as bruce511 mentions. Likely this will involve a longer marketting period and an opportunity for due dilligence. [1] https://therealdeal.com/texas/fort-worth/2024/04/05/opal-holdings-faces-1-6m-in-mechanics-liens-in-fort-worth/ https://therealdeal.com/texas/fort-worth/2024/04/05/opal-hol...

aorloff 2y ago

The office buildings are vacant. There is a sea of vacant office buildings as far as the eye can see.