After a period of time prescribed by state law and a notice to the public has been printed in the newspaper, the sale of the property is held at a public action in a public place, usually the county courthouse. If you have never been to one of these auctions, you should attend one just to become familiar with how they work.
The lender, by law, has an automatic bid for the total amount owed. The lender may not bid higher than that figure. If there are no other bidders, then the lender will receive the property for the entire amount owed (amount of loan plus interest plus expenses). Once the lender has taken title, these properties are referred to as R.E.O.s, or real estate owned by the lender. They also represent a good investment opportunity.
If the R.E.O property is ultimately sold by a lender for less than the total amount owed, the lender will probably go to court and seek a deficiency judgment against the borrower. If there are excess funds from the public sale, however, these would rightfully go to the borrower.
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[…] WLCCI a source for real estate investor wrote an interesting post today onHere’s a quick excerpt The Public Sale After a period of time prescribed by state law and a notice to the public has been printed in the newspaper, the sale of the property is held at a public action in a public place, usually the county courthouse. If you have never been to one of these auctions, you should attend one just to become familiar with how they work. The lender, by law, has an automatic bid for the total amount owed. The lender may not bid higher than that figure. If there are no other bidders, then the […]