Are banks crazy?!!! Wells Fargo sells house at a Texas foreclosure auction for $49,000 less what was offered just days before the foreclosure sale AND by the same buyer!

According to a recent article in the Houston Business Journal,last fall a potential homebuyer found the home of his dreams listed for sale in Kingwood, a suburb of Houston. The home was listed for $339,000. Since the home was in disrepair, the buyer made an offer to purchase the home for $260,000.The owners turned down the offer because they owed more than that on the property. (The estimated balance on the home loan taken out with Wells Fargo in 2006 was $297,535 according to Foreclosure Information & Listing Service, Inc.)

After the owners of the home moved out, the potential home buyer started negotiations with Wells Fargo. He offered Wells Fargo $260,000 cash – but got no response from Wells Fargo.According to the article, the buyereven made a last-minute effort to buy the home from Wells Fargo the day before the foreclosure sale on February 3, 2009.

Wells Fargo required a minimum bid of $211,000 for the house at the foreclosureauction. The buyer was the only bidder at the foreclosure saleand offered the minimum bid price. He bought the home at the foreclosure salefor $49,000 lessthan he had originally offered Wells Fargo!!!

I hope Wells Fargo is smart enough not to seek a deficiency from the previous owners of the home. If Wells Fargo does try to collect the difference between what was owed on the debt and the amount the property sold for at the foreclosure sale (the deficiency), I think a jurywill have a thing or two to say to Wells Fargo!