System and Method of Auctioning a Defaulted Loan

Abstract

A method and system for conducting an online property auction whereby the system allows for identifying an owner of property willing to sell his property by an online auction, entering into a contract with the owner obligating him to complete the sales of his property conducted pursuant to terms of the contract; pre-arranging a minimum auction price for his property that accounts for the owner's interest, plus costs and fees, conducting the on-line auction with a plurality of bidders for his property whereby at the on-line auction's conclusion there is a winning bidder and ensuring the transfer of the winning bidder's funds to the escrow holder.

1 . A system for auctioning a property, the system comprising:
 identifying property owners remotely connected to a computer network by utilizing a computer station whereby the property owners are willing to sell their property by an online auction;   providing a database to compile information on properties and property owners;   the database having at least contractual information whereby a property owner enters into contracts, the terms of which obligates them to complete sale of their respective properties;   the database containing information relating to at least a pre-arranged minimum auction price for each property that accounts for the property owner's interest, attendant costs and fees;   conducting the on-line auction hosted by a remote server with a plurality of bidders for each property, whereby at the conclusion of the auction there is a winning bidder; and   ensuring transfer of funds from the winning bidder to the property owner.   
     
     
         2 . The system according to  claim 1  wherein said property is a secured promissory note and the secured promissory note is delivered to the winning bidder through a licensed escrow holder located on the network. 
     
     
         3 . The system according to  claim 1  wherein the database contains information relevant to the auction including the secured promissory notes and supporting documents. 
     
     
         4 . The system according to  claim 1  wherein the database requires authentication of information from potential bidders, including proof of sufficient resources to successfully consummate the auction. 
     
     
         5 . A method of auctioning a property, the method comprising the steps of:
 identifying property owners remotely connected to a computer network by utilizing a computer station whereby the property owners are willing to sell their property by an online auction;   providing a database to compile information on properties and property owners;   the database having at least contractual information, whereby a property owner enters into contracts and the terms of which obligates them to complete sale of their respective properties;   the database further has relevant information relating to the property, including property information pricing and secured promissory note and related documents;   limiting bidding to bidders who have proven sufficient resources to complete the transaction;   conducting an auction for the secured promissory note whereby at the auction's conclusion there is a winning bidder;   arranging for the delivery of the original secured promissory note, its security instrument (trust deed or mortgage), the documentation supporting the value of security of the secured promissory note (appraisal), and evidence of ownership (title insurance) to a licensed escrow holder, who at the conclusion of said auction will deliver evidence of ownership of the original secured promissory note and related documents to the winning bidder and the appropriate proceeds to said note owner; and   ensuring the transfer of the winning bidder's purchase funds to the escrow holder.   
     
     
         6 . A method of doing business comprising the steps of:
 identifying property owners remotely connected to a computer network by utilizing a computer station whereby the property owners are willing to sell their property by an online auction;   providing a database to compile information on properties and property owners;   the database having at least contractual information whereby a property owner enters into contracts and which the terms obligates them to complete sale of their respective properties;   said database having pre-determined information relating to a minimum auction price for their respective properties that accounts for interest of the respective owner's, transaction costs and fees;   conducting a plurality of on-line auctions for a plurality of properties with a plurality of bidders for the owners' properties.   
     
     
         7 . A method of doing business according to  claim 6  wherein said property is a secured promissory note and wherein said method includes the step of arranging for the delivery of evidence of ownership of each secured promissory note to the respective winning bidder. 
     
     
         8 . A method of doing business according to  claim 6  wherein method also includes the step of placing on the auction portal relevant information about the secured promissory note and related documents. 
     
     
         9 . A method of doing business according to  claim 6  wherein method further includes the step of limiting bidding to bidders who have proven resources to complete the transaction. 
     
     
         10 . A method of doing business according to  claim 6  wherein the steps include holding and completing the auction for a defaulted secured promissory note immediately preceding the foreclosure, trustee, marshal, judicial or any other court ordered sale of the note's underlying security.