Borrowers whose homes were sold at a foreclosure auction might see some money come their way.
“It’s a new phenomenon, because we’re finally digging our way out of this housing hole,” says Daren Blomquist of Attom Data Solutions, which covers the real-estate industry.
At a foreclosure auction, bidding starts at the credit bid, which is the amount that’s owed on the unpaid mortgage, plus any fees that are incurred during the foreclosure. Typically, the home sells for less than the credit bid or not at all, Blomquist says. However, if the foreclosed home is sold at above the credit bid, “that excess money would go to the homeowner, if the homeowner can be located.”
Consumers whose home was foreclosed should research the property’s sale online or at the county recorder’s office after the auction, Blomquist says. In a few hot markets, such as Colorado and Oregon, the difference could be in the tens of thousands of dollars.
If they learn that the property sold for more than the amount that was owed, consumers then should contact the trustee or the attorney who was in charge of the sale, if the consumers weren’t contacted first. Blomquist says consumers should let these agents know that they want to claim any funds that are left after the lienholders are paid.