I believe so, especially if the mortgage holder doesn't think they're going to get a significantly better deal further on down the road.
Buyer's down payment (if any)? Gone.
The difference between the mortgage loan balance due and the sale amount, to the best of my knowlege (not that I actually know what I'm talking about) will be either covered by mortgage insurance (PMI) or eaten by the bank.
In the latter case, I think that theoretically the bank can come after the original mortgage holder for the difference, but that's kind of silly - if they had that kind of money, they wouldn't have gotten foreclosed in the first place.
thanks and I look forward to other comments of confirmation. Seems if an ole boy was sitting
on an extra million,foreclosures would be great cash buys
all things considered.
" bought for 100 k if that is the highest bid ? "
Only if there is no reserve (minimum amount that can be accepted)
I used to handle foreclosures for a large bank. Essentially, the minimum amount the bank will take for the property depends on the loan type.
FHA loan - bidding will start at the total debt, which includes the principal, interest, attorney fees, securitization fees, taxes and any force-placed insurance that was neede during the foreclosure.
VA - Often a total debt bid also. Sometimes there is a buydown.
CONVENTIONAL - varies. Sometimes it's based on a BPO (Real Estate Brokers Price Opinion). Sometimes it's closer to total debt.
New buyers don't get to see the condition of the house inside, so they are at a distinct advantage. Some borrowers throw a tantrum when they are losing the house and mess it up bad inside. I've seen houses where the fixtures were gone, copper piping was gone, and walls were full of holes.