Posted by Jusk on November 03, 2009 at 08:35:17:
I see, so the bank has a lien not ownership and the auction is how they obtain actual ownership.
Don’t understand auction process… - Posted by Jusk
Posted by Jusk on November 02, 2009 at 12:50:06:
Why do foreclosures go through auction where, most of the time, the lender “buys” it back? The lender already has ownership of the property since it’s collateral for the loan. Is this required by law for loans that are gov’t backed or do the lenders hope to get bids higher than what they have in it? Can anyone clear this up for me…Ray maybe… 
Re: Don’t understand auction process… - Posted by Ken
Posted by Ken on November 02, 2009 at 18:43:04:
The lender does not already have ownership,they have a lein against the property.When the payments are not made the bank does a foreclosure action.That causes the auction at which the lender places their bid.If someone else wants it they can outbid the bank,if no one out bids the bank then the bank gets it and the referee transfers ownership to the lender