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Posted by steele in minnesota on January 04, 2007 at 06:57:35:
In Reply to: Auction Bid on Foreclosure posted by Gabe on January 03, 2007 at 14:48:33:
Keep in mind that the starting bid is what the lender that is doing the foreclosing is owed. So if anyone else bids it will be higher.
Excess money goes to pay off all debts against the house first and anything left over goes to the original owner.
Now there may be more than one debt against the property. If a first mortgage forecloses there could be a second mortgage or home equity line that would get some or all of the extra.
Also a secondary lender could be bidding at the auction as well. This would drive up the bidding beyond what was owed to the foreclosing lender.
Where we don't see many bids going higher are in states that have longer redemption periods after the auction. Here in Minnesota (and Michigan as well) there is typically a six month redemption. That creates so many unknowns that few will bid other than the foreclosing lender, if any.
States like Texas that typically have no redemption can see some spirited bidding that pushes the price up.
So it depends on the area, if there is more than one lender, etc.
Steele V. Propp
Foreclosure Specialist/Loss Mitigator
Schatz Group GMAC
Minneapolis, Mn
steelep@aol.com
http://www.MinnesotaForeclosureNetwork.com
