What Is a Foreclosure Sale?

Video Transcript

"Hi this is Matt McKillen I'm with Innovative Financial Group. The question posed to me today is what is a foreclosure sale? The foreclosure sale is basically the last step in the process of foreclosure of your home. When your lender first files foreclosure against you, basically it's a legal action against you demanding the delinquent payments on your mortgage. On average people are usually a minimum of 3 to 4 to sometimes 6 months behind when that foreclosure action is filed. If during that process, that time process involved in processing the foreclosure going to court, if in fact you cannot cure that default, if you cannot bring in the late payments, you can't refinance to pay your loan off or you're unable to sell your property, the court gives permission to the bank to go to a foreclosure sale. Now the foreclosure sale is usually conducted on the courthouse steps in either your city or your county where your property's located. And what happens is the bank will have someone bid out the amount that is owed on their loan, that includes the principal balance plus all the costs incurred and the late payments. So if someone is to bid on that property on the courthouse an offer to pay that bank that money, then the sale is completed and someone on the courthouse steps would then in turn own that property. If no one bids on the loan or no one goes in and bids on the bank or pays the bank their asking bid, then what happens the sale does still complete but what happens is the property is now owned by the bank and is called what is it's an REO or Real Estate Owned. So foreclosure sale again is the end of the foreclosure process to where the bank literally puts your house up on a sale to the public and you will lose your home on that date. Again my name is Matt McKillen, I'm with Innovative Financial Group."