Post Judgement

The Auction

If the default is not cured within three months after the Notice of Default is issued, the lender or their representative (the foreclosure trustee) sets a date for the home to be sold at an auction called a Trustee Sale. The Notice of Trustee Sale is recorded with the County Recorder’s Office, delivered to the homeowner, posted on the door of the property and published in a local newspaper -- to make sure everyone knows when and where the auction will be.

This auction is either held on the steps of the county courthouse or in the trustee’s office. In many states, the homeowner has the “right to redemption” (he can come up with the outstanding cash and stop the foreclosure process) up to the moment the home is sold at the auction.

At the auction, the home is sold to the highest bidder. The big catch is that these auctions require cash payment in most states; few third-party buyers can afford to bring enough cash to the courthouse to pay in full. As a result, many lenders either simply ink an agreement with the homeowner to take the property back (called a deed-in-lieu of foreclosure) or buy it back themselves at the auction.