Sale of seized property - how Sberbank conducts it

Mortgage apartments from Sberbank are a kind of real estate sale. The bank legally takes the collateral as repayment of the mortgage debt taken by the borrower.

For those who want to buy an inexpensive apartment, this is an excellent option, since the bank often reduces the price of collateral real estate in order to quickly find a buyer, sell the living space and close their financial “holes”.

How to buy a collateralized apartment from Sberbank, how to get to the auction and how safe is it to acquire real estate left to the bank as collateral?

Collateral – main categories

What types of collateral is there for Sberbank? Within the meaning of Art. 336 of the Civil Code, any liquid property of the borrower, including property rights, can be provided as collateral.

Property as collateral

The relationship between the parties is regulated by the Mortgage Law

For credit collateral, Sberbank willingly issues:

• residential buildings in whole or in parts, cottages;
• apartments, rooms;
• garages, parking spaces;
• garden houses and dachas;
• land;
• administrative buildings of organizations, buildings used in economic and entrepreneurial activities.

In this case, the relationship between the parties is regulated by the Law “On Mortgage”.

What is meant by movable property?

The definition of the category is given in Art. 130 GK. Let us present the disposition in everyday language. Firstly, all these objects should not be classified as real estate.

And second: they are not firmly connected to the earth. That is, they move freely in space without irreparable damage. Not every property will be accepted by Sberbank as loan collateral. To actually make a deposit:

• on vehicles;
• securities, bank account;
• for goods in circulation by individual entrepreneurs or enterprises.

An important condition is that transactions with such things must be subject to state registration.

Property rights

Increasingly, banks are issuing a pledge on property rights - legally established grounds for ownership, use and disposal of property assets (Part 2 of Article 337 of the Civil Code).

There is no physical object yet, but there is an agreement to acquire it in the future. Apartments in new buildings under agreements of shared participation of citizens in construction are the most common option for legal pledges of citizens.

The procedure for encumbering “sharing”:

• after registering the DDU with Rosreestr, the bank issues a mortgage for the right of claim;
• a note about the pledge is placed on the contract;
• After registration of real estate ownership, the pledge is reissued to this object.

When lending to representatives of entrepreneurial/economic activities, rights to future movable things, rights to proceeds, rights to bank accounts, and rights of obligations are accepted as collateral.

How is collateral real estate from Sberbank sold at auction?

The process of a bank selling a collateralized apartment at auction looks something like this:

1. The bank puts the mortgaged living space up for sale, indicating the starting price of the apartment. Typically, the initial price is between 70 and 75% of the market value of the property.
2. Potential buyers offer their price, but it should not be lower than the original cost.
3. The buyer is the bidder who offers the bank the highest price.
4. If within 14 days the bank does not find potential buyers for the mortgaged apartment, then it reduces the price of the apartment (by 10–15%). And the process of reducing the value continues until the bank finds a buyer.

A new buyer of collateralized real estate can purchase housing in cash (by transferring funds from a bank account) or take out a mortgage from Sberbank to purchase housing.

Why does Sberbank resort to selling a collateralized apartment only as a last resort?

The bank thinks about itself first. It is also unprofitable for him to engage in the confiscation and sale of collateral real estate, because:

• when alienating the collateral, the bank may have problems;
• due to the fact that the apartment was pledged to the bank, its value upon sale drops significantly;
• Due to the sale of such an apartment, it is often difficult for the bank to compensate for losses associated with repaying the mortgage;
• The process of considering a case in court on the transfer of collateral property can drag on for several years.

The sale of an apartment left by the borrower as collateral is an extreme measure that banks, including Sberbank, take in order to pay off the borrower’s debt. Such apartments usually come at a price below market value, so those who want to save money can consider this option for purchasing living space.

To do this, you need to register on the online platform, select an object, and offer a higher price for it.

If no one else puts a price higher than yours, then consider that the apartment is already half yours . All that remains is to pay for it by depositing cash into a bank account or by drawing up a mortgage agreement.

Features of Sberbank's collateral property

Sberbank's collateral facilities are located in 23 constituent entities of the Russian Federation. Real estate, movable property of the borrower, as well as property rights are accepted as encumbrances. However, almost 49% of the total collateral assets are residential and non-residential real estate. The reasons are:

• these objects quickly find their buyer because they solve investment problems;
• expensive property is sold at prices below market prices, which allows you to make good money even on one transaction. Or save money when solving a housing issue;
• price losses in the long term are not critical. Especially when you consider that real estate with depreciation depreciation of no more than 50% is accepted as collateral.

The main guideline when approving a collateral is its liquidity and market value during the validity period of the loan agreement. The point is to sell the object as quickly as possible in the event of the client's insolvency. Yes, so that the proceeds compensate as much as possible for the losses incurred by the bank from the unprofitable loan.

How does Sberbank sell seized property?

The threat of losing collateral arises when credit is overdue for more than 90 days

The real threat of losing collateral arises when credit is overdue for more than 90 days. For implementation one of the following conditions is required:

• an agreement with an insolvent borrower to cover his debts using a mortgage;
• a court decision to seize and put up collateral for auction when the borrower refuses to resolve the issue of overdue debt.

The matter will not come to litigation if a bilateral agreement is concluded between the creditor and the debtor on property coverage of penalties. There is one nuance here:

• With the written consent of the bank, a citizen can independently sell the object of encumbrance. Of course, in favor of the mortgagee;
• The law allows 2 to 3 months for the voluntary sale of property.

Repayment of the borrower's overdue debts at the expense of the property is carried out by initiating bankruptcy proceedings.

Previously, the bank offers the debtor to restructure payments. If this option is not feasible, it is necessary to confirm in court the insolvency of the defendant and obtain a court verdict to sell the property. Stages of forced sale:

• judicial arrest and inventory of the debtor's property;
• determination of property categories sold through open tenders;
• putting objects up for auction.

In practice, the courts take the side of the creditor in 90% of situations. As a result, the guaranteed property is seized and sent for auction.

Auctions

Sberbank prefers to sell debtors' property through an auction system, when seized assets are sold on automated virtual platforms.

The electronic format has significantly expanded the range of possible participants and made bidding conditions more transparent. There are two forms of this event:

• open bidding, when all participants see bids in real time;
• closed bidding without the publication of participants' proposals. If necessary, the operator opens an auction.

In the showcase of a special website, all lots are displayed with a starting price 25-30% lower than the market price. The winner of the electronic auction is the participant who offers the best price for the lot.

Any citizen or legal entity has the right to purchase collateral assets of Sberbank if they have a certified electronic signature (ES) and accreditation on the trading platform (TP). It is even possible to sell apartments from Sberbank at auction.

Obtaining electronic signature and accreditation

Electronic digital signature is a software code, one of a kind for each bidder. A unique digital code endorses purchase/sale agreements and other auction documents, and therefore there are strict requirements for its reliability.

If you can submit documents online, you will have to go to a certification center to receive an electronic signature. This is necessary to establish and confirm the identity of the potential owner. The general procedure is as follows:

• select the nearest certification center on the State Services portal, on the website of the Ministry of Communications of the Russian Federation;
• fill out and send an application electronically or come to the center in person;
• pay the invoice, send confirmation;
• visit the CA to obtain a signature.

Advantages of purchasing collateral real estate from Sberbank

State Bank is an open financial institution whose clients can request a list of collateral for sale by email or fax.

Cooperation with Sberbank is beneficial because:

• there are no additional costs associated with the purchase of collateral real estate;
• the purchase and sale of collateralized housing is carried out promptly;
• a transaction with Sberbank is a guarantee of the reliability and legal purity of the property being sold;
• the housing that the debtor is selling is under the control of the bank;
• the cost of an apartment left to the bank as collateral is usually lower than the market value.

Why is it better to buy a mortgaged apartment from Sberbank?

The thing is that the sale of collateral by Sberbank occurs through a subsidiary of this bank - Sberbank-AST. Bidding takes place on this electronic platform and seized property is sold.

In order to become a participant in the auction of collateral, you must register on the portal https://www.sberbank-ast.ru/ and obtain accreditation . Individuals wishing to purchase an apartment must make an electronic digital signature, which will facilitate the process of purchasing housing.

Also, after confirming accreditation on the website, a person must top up his virtual account with an amount that must be at least 2% of the cost of the collateral housing.

Sberbank electronic platform

Where can I see the display case of Sberbank's collateral? You can buy Sberbank's collateral on the portal of CJSC Russian Auction House (RAD) zalog.Lot-online. This is where participants submit applications, place bets, enter into purchase/sale agreements, and make calculations:

• the site is open 24 hours a day;
• lots are displayed in the website window. The order of presentation changes according to the schemes “expensive/inexpensive”, “new/old”;
• there are filters for sorting assets by type of property, value, geographic location, and how long ago they were put up for auction;
• When you click on the lot link, a detailed description of the object is provided.

Notifications about current changes in legislation, operating hours, and new facilities are sent directly to the email address of accredited persons.

List of property that can act as collateral for a mortgage

The bank can take the following types of real estate as collateral under a mortgage agreement:

• apartments;
• residential buildings;
• rooms;
• cottages;
• land;
• garages;
• buildings, administrative buildings.

The estimated value of the collateral property should not be lower than the amount of the mortgage taken out by the borrower from the bank.

If the borrower regularly makes monthly mortgage payments and does not make late payments, then the collateral remains with him.

If, due to some circumstances, he ceases to comply with the terms of the contract, he develops debt and does not know how to repay the mortgage loan, then his collateral property is transferred to the bank, which subsequently sells the collateral to another buyer.

And thus the bank returns its money, compensates for the costs it incurred in processing and issuing a mortgage.

Apartments are sold in several ways:

• direct sale;
• auction held by Russian Auction House JSC and Sberbank-AST CJSC.

Sberbank can begin selling a collateralized apartment only after a court decision is made to confiscate the debtor's property or after the current borrower gives his consent to the sale of the collateral.

And the bank can go to court only when the borrower does not try to resolve the issue of repaying the mortgage peacefully, does not compromise, and does not even pay interest on the loan.

Sberbank sells an apartment mortgaged by a former borrower in 21 regions of the country.

The procedure for putting property up for auction

Bidding is held only if more than two participants “appear” for the procedure. There is nothing complicated in the trading algorithm:

• lots are assigned unique numbers depending on the time they were displayed in the showcase;
• at the appointed time, participants offer their own price for the object. Proposals below the starting price will not be accepted for consideration;
• the winner is the person with the highest price;
• After the auction ends, safety bids will be accepted for 10 minutes. This is done in case the winner refuses to buy the property.

To ensure that information about the movement of bets arrives in a timely manner, it is recommended to install the auto-refresh function of the page. From time to time, this can be done manually, but during bidding, even a second’s distraction from the process may well do a “disservice” when a profitable lot goes to another buyer.

What happens if the collateral is not bought?

After seizure, the apartment must be sold within 2 months. The initial price is indicated in the court decision or in the writ of execution. If the first auction is declared invalid due to lack of applications or lack of quorum, a repeat auction is held at a reduced price by 15%.

This decision is made by the court based on the bank’s application to reduce the price. It is repeated auctions that provide a chance for a profitable acquisition. Experienced business players in bankruptcy are purposefully waiting for this stage.

Property insurance

Insurance protection of the collateral is issued upon concluding a loan agreement. This is a necessary step in the case of secured lending.

The borrower is interested in insurance no less than the bank. In the event of a complete loss of the collateral asset with the resulting insolvency of the client, the insurance company will compensate the bank for losses.

The limit of payments is determined by the sum insured. Its size is determined by:

• type of collateral;
• its characteristics;
• the amount of the deductible (the part of the losses that is not covered);
• insurance period.

Information for buyers

Contents of the package of documents for obtaining an electronic signature:

• passport;
  Certified signature is valid for a year
• statement;
• TIN;
• SNILS.

Contents of the package of documents for opening access to trading:

• statement;
• passport;
• TIN;
• email data.

A certified signature is valid for a year. Documents that must be submitted for the selected lot to participate in the auction:

• application for participation in the ETP form;
• confirmation of payment of the deposit for the object - a bank payment document;
• an envelope sealed in the prescribed manner indicating your own assessment of the property: not lower than the starting cost;
• a list of submitted documents with the exact date of their sending to the auction operator.

Submitted applications are endorsed by the ETP commission on the publicly announced day of registration of auction participants. The reasons for refusal of admission boil down to an incorrectly assembled package of documents, inconsistency of the papers themselves, violation of deadlines and submission rules.

Note. If you win, the deposit will be added to the total price of the lot. Losing bidders will receive a full refund of their advance payment. But if the winning bidder refuses to buy the lot, he loses the deposit completely.

Register on the site

At the Sberbank-AST site you need to undergo registration and accreditation. To do this, you need to connect your digital signature, click on the “Register” button, fill in all the data step by step and attach the requested documents. The interface and list of requirements are periodically updated, so we will not provide extended instructions. A few days after sending the application, a response will be received that will confirm registration or indicate a list of adjustments. If any difficulties arise, you can contact Sberbank-AST technical support with any questions.

How to get accredited on the Sberbank AST site. The instructions were compiled for legal entities, but all individuals will undergo a similar procedure. The difference is in the number of documents.

How to go to the site and see available lots.

How to restore access to Sberbank-AST if your login and password are out of date, a system error has occurred, or the digital signature certificate has expired.

During the registration process, you will have to prepare many documents, which are conveniently submitted in PDF format. The PDF24 Creator program is great for this.

How to optimize a document in PDF24 Creator.

Benefits and pitfalls of purchasing a collateral asset

Purchasing seized property and even building a “small business” on this basis is rapidly gaining popularity. There are reasons for this:

• Sberbank carefully checks the condition of the confiscated property;
• obtaining the right to participate in auctions is quite simple and not expensive;
• transactions can be carried out from anywhere in the country;
• the property is sold at an attractive price;
• Sberbank provides loans and arranges mortgages for buyers of seized property.

However, there are also many unpleasant moments in bank auctions:

• the lender may deliberately inflate the starting cost of liquid assets;
• If minors/incapacitated persons are registered in the apartment, they will have to be discharged by court. Mostly this results in protracted litigation and costs;
• you will have to scramble to remove the encumbrance from the auction property;
• An impressive tail of utility or tax debts may trail behind the property. With huge debts, the price benefit is reduced to zero.

But the main danger of buying seized property is that you can simply lose it. The fact is that not all “problem” borrowers agree with the seizure of real estate, so they go to court with protest claims. Defending your interests is not so easy: you will need knowledge, legal practice, and financial costs.

However, “pitfalls” are not a reason to avoid the opportunity to profitably acquire attractive assets. You just need to study the legislation related to this area, study the features of the ETP and carefully check the lots being traded.

Submitting an application in the AST system

Go to the “Trading” tab and the only subsection “Trading Register”. Then you can sort the available auctions using a short filter and a detailed filter. The second one is preferable, since the short one has practically no parameters to configure. However, if you try to over-specify the search engine, most likely you will not be able to find a single sensible proposal, so it is recommended to configure only the format of the holding form and the state of the auction.

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Such items as “name of the debtor”, “tender organizer”, etc. may only be needed if you are looking for a specific property that, for some reason, is not shown in the general list.

After setting up the filter, click “search” and the system displays available trades. The bidding status will be indicated in the far right column. To participate, the status next to the lot you are interested in must be “accepting applications”.

The far left column contains links to auctions. Click on the item you are interested in and you will be taken to a page with information about it. The first section provides general information about the product being sold. Below are the contact details of the auction organizer. Below you can find information about the debtor. The most interesting section for those who really want to purchase something is the price change chart. Then select “Information” and more detailed information about the lot and its owner opens. The amount of the deposit is also indicated there. Occasionally it is fixed, but often only a percentage of the constantly changing current supply is constant (no more than 20%).

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Legal entities can use existing accounts. Individuals must open a current account in a bank, since a deposit account cannot be used. You need to receive a receipt for the contribution, scan it and upload it to the website. In case of loss, the money will be returned to the account within 5 days, unless:

• you did not win the auction and now refuse obligations;
• you did not withdraw your bid before the end of the auction.

Therefore, depositing funds to ensure your participation in good faith.

To make an application you must also enter the following information:

• Full name, address, number and series of passport for individuals.
• Type and name of the company for legal entities.
• Contact details;
• Information about interest in the subject of the transaction;
• For closed bidding – price offer.

Note to borrowers: is it worth bringing the situation to the point of selling the collateral?

This is undoubtedly a last resort option. Far from being the most profitable for the borrower. And that's why:

• first, if a person fails to sell the collateral at the market price within the 3 months allotted by the bank, a liquid value is assigned at the auction, which is lower than the actual valuation;
• further, the property “frozen” on the ETP loses even more value, and it is likely that the proceeds will not be enough to cover the loan amount, all fines, penalties, and legal costs;
• the last point - in this case, the bank has the right to foreclose on the debtor’s unsecured property (with the help of bailiffs and the court).

Therefore, if a financial collapse looms, you should not run from the bank. Everything possible must be done to resolve the situation with the least possible losses.

Refund of loan insurance in Sberbank, VTB, etc.:

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Discussion: 3 comments

1. Dina says:
   06/05/2018 at 00:58

   Not every person can take out a mortgage from us; it is given only to those citizens whose salary is at least 50 thousand rubles. And who has such a salary now? Unfortunately, there are few such people.

   Answer

2. Natasha says:

   06/08/2018 at 00:35

   In addition to ordinary apartments, you can take out a mortgage for a room in a hostel, which is a more acceptable option for the poor, but again, not all of our poor earn enough to be able to take out a mortgage even for a room.

   Answer

3. Ivan says:

   06/09/2018 at 13:13

   In theory, the seized collateral property should have a really low price, and even if it is possible to buy it at this price with a mortgage, then this option should be very interesting for people with strong nerves. Because nuances with former residents are very likely.

   Answer