Bidding on Foreclosed Property

Posted on December 1, 2010

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When a homeowner defaults on a loan, the lender takes the note, and forecloses on the property, auctioning the property off as soon as possible. The auction price usually is the remaining monies due on the loan, which of course is much less than the original price of the property. After all, the lender just wants their money back.
 
These deflated prices make foreclosure sales quite popular with those who want to purchase at a low price. Could someone who was foreclosed upon find a family member to buy the property for them at the lesser price? That is an interesting ethical question.

The answer is “yes.” In fact, mortgage holders have been known to go to the auction themselves and bid on the property.

See Axsmith Law for more information.
 

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