AB 691

This bill limits who may bid at a sale of foreclosed property, requires a

purchaser of foreclosed property to submit an affidavit to the clerk of court affirming

that the purchaser is an eligible bidder, and provides penalties for a purchaser that

makes a false representation on that affidavit.

Under the bill, no person other than a party to the foreclosure action

(third-party bidder) may bid at a foreclosure sale if any of the following applies:

1. The third-party bidder owns property against which property taxes have

been levied that are more than 120 days delinquent.

2. The third-party bidder is directly or indirectly owned, managed, or

controlled by a person that owns property against which property taxes have been

levied that are more than 120 days delinquent.

3. The third-party bidder directly or indirectly owns, manages, or controls an

entity that owns property against which property taxes have been levied that are

more than 120 days delinquent.

4. An unsatisfied judgment related to a violation of a state or local building code

with respect to property in this state has been rendered against a) the third-party

bidder; b) a person that directly or indirectly owns, manages, or controls the

third-party bidder; or c) an entity that is directly or indirectly owned, managed, or

controlled by the third-party bidder.

5. The third-party bidder is bidding on behalf of or as part of an agreement with

a person to which any of the conditions described above applies.

The bill also prohibits any assignment of a bid submitted at a foreclosure sale

to a person that does not meet those minimum bidder qualifications.

Under the bill, a third-party bidder must file an affidavit with the clerk of court

affirming that the third-party bidder meets the minimum bidder qualifications, and

the court may not confirm the sale until that affidavit is filed. If the court determines

that the affidavit contains a false representation, the court may choose not to confirm

the sale and may order that the property be resold and the third-party bidder's

deposit forfeited. If the court determines that the false representation was made

knowingly, the court also may order the third-party bidder, the individual who

signed the affidavit on behalf of the third-party bidder, or both to forfeit up to $1,000

and may bar the third-party bidder, the individual who signed the affidavit on behalf

of the third-party bidder, or both from participating in any foreclosure sales in the

county for a period of time not to exceed one year from the date on which the order

is entered.