Are foreclosure auctions blocking offers they are supposed to accept?
With stacks of cashiers checks made out for different amounts in hand, seasoned investors flock to foreclosure auctions, ready to pay for homes on the spot. But the tight inventory of homes for sale could send more aspiring homeowners into the fray, creating both competition and confusion. While many of these newbies may be able to pay cash for a property, they are not always armed with a collection of cashiers checks with which to pay on the spot. That has led to some winning bids being rejected, which in turn has led to a lawsuit. Gerald McMillan, an Austin resident whose home was auctioned, believes the trustees tasked with auctioning off foreclosed homes are illegally hurting homeowners by refusing offers from people who can pay in cash, but dont have enough money on them to pay immediately. On HoustonChronicle.com: Foreclosures are back in Harris County, after a year's delay by executive orders  When homes sell for more than what is owed, the homeowner keeps the difference, and an offer for $425,000 above what McMillan owed was rejected because the buyer did not have the money on his person. The Texas Supreme Court will decide Friday whether to hear his case. While it is unclear how many offers are stymied by trustees who refuse offers that cannot pay on the spot, McMillan argues that many others facing foreclosure could face similar situations. Housing prices charted a dramatically different path during the recession than in the last. Instead of falling, and leaving many owing more than their homes are worth, values have skyrocketed to new highs. At foreclosure auctions in June, many homes sold for more than what was owed. At the heart of McMillans argument is the interpretation of a state law overseeing foreclosure. In it, the law says the purchase price is due and payable without delay on acceptance of the bid or within such reasonable time as may be agreed upon by the purchase and the trustee or substitute trustee if the purchaser makes such request for additional time to deliver the purchase price.  Up until 2009, the law said that the purchase price was available immediately on acceptance of the bid, but state legislators changed the wording, according to the house of representatives research arm, to remedy what became an unforeseen and unintended consequence of the legislation where trustees may refuse to accept a foreclosure bid if the cashiers check was not for the exact amount of the accepted purchase price.