Illinois receiver and assignee Mr. Arthur van der Vant spoke recently with Presentation Solutions staff regarding his ideas for helping both the real estate market and the judicial system handle foreclosure proceedings.
Presentation Solutions: Thank you, Arthur van der Vant for taking the opportunity to speak with us. Can you talk to us about the benefits of a Receiver’s sale?
Arthur van der Vant:I’ll be happy to. A Receiver, under the Court’s supervision, could conduct an auction sale of mortgaged real estate similarly to a Trustee in Bankruptcy who liquidates the estate to pay creditors.
Presentation Solutions:Is this normally a requirement?
Arthur van der Vant:The Receiver’s Sale couldbe carried out by Agreed Order, or it couldbe mandated by the Court, at a Judge’s discretion.
Presentation Solutions:What sort of benefits does it offer?
Arthur van der Vant:A Receiver’s Sale couldprovide a quicker resolution to foreclosure complaints currently on file. Receiver’s Sales have the potential to shorten the cycle of foreclosure proceedings by months and they can decrease the caseload on the Courts, as well as on the amount of properties being offered for sale at the Judicial Sale.
Presentation Solutions:And judicial sales generally do not generate much result since most properties are taken back by mortgage lenders, correct?
Arthur van der Vant:Yes, that’s right. Additionally, a Receiver’s Sale allows mortgaged real estate to be sold via auction during the pending foreclosure proceedings, subject to Court’s approval.
Presentation Solutions:Would this be instead of a foreclosure?
Arthur van der Vant:It would not interfere with the foreclosure proceedings and it would be conducted parallel to it. In the event a Receiver’s Sale is not approved by the Court, the mortgaged real estate would still sell at a Judicial Sale.
Presentation Solutions:How would the sale take place?
Arthur van der Vant:A Receiver’s Sale conducted via Auction Method would allow for an arms-length, impartial transaction, where the only discrimination is the amount of money an able, willing, and ready buyer wouldpay for the mortgaged real estate.
Presentation Solutions:Why do you think that a Receiver’s Sale would bring in more money than Judicial Sales?
Arthur van der Vant: Because a Receiver’s Sale could be more flexible. For example as the foreclosure case is still pending, the Closing could occur within 30 or 45 days after the Receiver’s Sale date.
Presentation Solutions:That makes sense; it would allow the bidder/buyer time to obtain regular mortgage financing.
Arthur van der Vant:Yes.In contrast, Judicial Sales require 10% deposit at the time of bidding and the balance within 24 hours, which is a huge limitation for the majority of buyers and it limits the pool of prospective buyers to a few investors who pay cash and are looking for a high returns on their investment.
Presentation Solutions:So it sounds like, by matter of circumstance, the judicial sale is generally only a good idea for an investor since they usually have more cash in hand.
Arthur van der Vant:A “user buyer” who couldbuy with a downpayment and obtain mortgage financing for the balance of the purchase pricewill always pay more than an investor would.
Presentation Solutions:Are there other reasons that you believe that this type of sale is beneficial?
Arthur van der Vant:Receiver’s Sales would bring higher sales prices than Judicial Sales that are conducted at the end of the foreclosure process, because they could be better advertised. For example, as the foreclosure case is still pending the Receiver could list the upcoming auction of mortgaged real estate in the Multiple Listing Service (MLS) and offer a commission to all Illinois Real Estate Brokers who may have a bidder/buyer.
Presentation Solutions:Real estate agents charge fees, would that not offset the benefit of the sale?
Arthur van der Vant:As a part of the Receiver’s Sale, the Receiver could charge a “Buyer’s Premium” to offset the broker’s commission. In such an arrangement there would be no additional cost and the commission would be funded by the buyers themselves.
Presentation Solutions:Who does the Receiver’s Sale benefit?
Arthur van der Vant:A Receiver’s Sale would benefit Plaintiffs and Defendants by allowing the mortgaged real estate to be sold much sooner and for more money. Shorter time span of a foreclosure proceeding would save court costs and fees for all parties.
Presentation Solutions:What about the court system that handles the legalities of a foreclosure?
Arthur van der Vant:Receiver’s Sales would benefit the Court by reducing the amount of pending cases and they would provide an efficient outlet to those property owners who want to sell their real estate.
Presentation Solutions:It sounds like what you’re saying is that Receiver’s Sales would open up the pool of foreclosed properties to the general public and they would benefit those “User Buyers” who are not investors.
Arthur van der Vant: Yes, exactly. I hope that I have clearly demonstrated here that the idea of Receiver’s Sale would save money and be a direct benefit to borrowers, lenders, and the Court adding efficiency, productivity, and cost savings.
Arthur van der Vant is a receiver and assignee based in Cook County, Illinois. He is an expert in real estate and corporate turnaround management with over 10,000 projects to his credit. As a member of several professional organizations, including the Turnaround Management Association and the National Association of Bankruptcy Trustees, Arthur van der Vant is up to date on every aspect of his profession. He is one of only a handful of Certified Commercial Investment Members (CCIM), and has trained at the World Bank Headquarters in Washington DC. Currently, Arthur van der Vant practices at his firm, Illinois Receiver.
For more information or to contact Arthur van der Vant, please call 800-496-9107
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