Foreclosure sale

In order to pay creditors in a foreclosure proceeding, an auction, (trustee's sale or sheriff's sale), may be ordered. The sale is administered by a trustee. The notice of the sale is published in in the manner required by law (often in local newspapers) in the county where the property is located. The trustee also records the notice in the county where the property is located.

The auction may be an oral "open outcry" auction, or bids (offered amounts) may be submitted in writing with a specific deadline for receipt of these bids.

A "credit bid" is made on behalf of the lender at a foreclosure sale and is must be less than or equal to the balance of the loan in default. The credit bid acts as a minimum bid.

An "upset bid" is a recorded bid placed after a foreclosure sale has ended that is higher than the highest bid received at the actual foreclosure sale. For example, in one state, bidding remains open until 30 days after the actual sale. During that time, an upset bidder may outbid whoever made the highest bid at the actual foreclosure sale.

In some states -- not all states -- the borrower has the right to reacquire property lost due to a foreclosure. This is called a right of redemption. Any certificate of sale given to the winning bidder at a foreclosure sale does not actually transfer rights until the right of redemption period has expired.

In some states, even after a foreclosure sale, a deficiency judgment can stand against the borrower for the remaining balance on the loan after a foreclosure sale does not pay the full amount due.

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