[Info-vax] OT. Auction of Maynard's Clock Tower Place

[BillPedersen]

On Sunday, March 15, 2015 at 8:39:26 PM UTC-4, JF Mezei wrote:
> On 15-03-15 17:53, BillPedersen wrote:
> 
> > It is doubtful that Saracen paid $64Million for the mortgage.  Wellesley has been behind on their mortgage 
> 
> You're right. I had not thought of that.
> 
> What is not clear is the machinations behind Saracem getting the deeds
> to property.  If it foreclosed, it would send Wellesely into bankruptcy
> which doesn't seem to be the case.
> 
> But if the mortgage is worth say $30 million, and Saracem offers
> Wellesey $30 million + $1, then it to to Welleseley's advantage to sell.
> 
> So Saracem pays JP Morgan 30 million for mortgage.
> Then it pays Welleseley $30 million to buy property.
> Then Wellesely pays back its mortgage to Saracem to the tune of 30 million.
> 
> makes sense. SO the real negotiation was between Saracem and JP Morgan
> to set the valuye of that non performing mortgage.

Not quite how foreclosures work.

Saracen has already foreclosed or possibly JP Morgan started the process.  The auction of property at foreclosure is not held by the holder of the deed but the holder of the lien on the deed.  And the auction is to satisfy the lien.  So in essence Saracen is auctioning the property - high bidder gets the property.  But there is a $500K deposit necessary to qualify to bid.  So Saracen will "buy" the lien from themselves as they will likely be the sole bidder.  This "process" of foreclosure then either forces Wellesley to turn over the deed or it can in fact be voided by the court - but in this case it sounds like all parties are working in the common direction.

Foreclosure of a commercial property does not necessarily result in the bankruptcy of the company which is the target of the foreclosure.  It is much more complex than that.

I suspect that Saracen got the mortgage for substantially less than $30Million.  I would believe it probably paid less than the current appraised value of the property.

If you are going to get nothing from the current mortgagee and you do not want to be in the "mall" business or any sort of "retail space" business then you might be willing to sell the mortgage for a very low price.

Bill.

Bill.