what is the amount the bank gets at foreclosure?

Is the bank allowed to recover all their past due fees at the auction? Or are they just trying to get the principal paid off?

For example: 1st mtg has a principal of 95k and the arrears are 15k with missed payments and atty fees. Is the bank just trying to get the 95k or are they trying to get 110k?

It could depend on the specific state law, but generally speaking, $110k.

In Florida, lenders will get the entire amount set forth by the Final Judgement. This figure will include principal balance, interest, filing and recording cost, other lender cost, appraisal cost, title work, and attorney fees. There might be other fees I’m forgetting, but to answer your question…$110k. This is how the bank’s bid amount at the courthouse is derived.

Here in Illinois when they file Lis Pendens the amount sued for is the principal loaned. So is it still the case that at auction the lender goes for arrears, late fees and lawyers cost?

well we are in GA where foreclosure is non-judicial, so i am wondering if its the same here since there is no judge to set arrears, etc.

I am curious what happens to the additional funds at the auction, if any. Continuing on with the example above, if the house sold for $120k at auction, what happens to the additional $10k?? Does it go to the bank, or to any junior liens??

after all liens are paid, the original homeowner gets the proceeds

Yep, bank cannot profit beyond what is actually owed for principal, interest, fees, etc. Junior lien-holders get it (if any) or else it goes to the home-owner.

So if the bank foreclosing cannot profit, then they won’t/can’t bid past what is owed to them correct?

actually i dont know if theres anything legally stopping them from bidding higher. But regardless of who bids, anything over the predetermined amount owed, the other liens are paid, then the homeowner gets the proceeds.

Banks are NOT in the real estate business so they are not going to bid over what is owed.

Heres another question I thought of. Do the banks bid what is owed or do they sometimes get them for less than what is owed? I am assuming if noone is bidding, there no reason for the bank to drive the price up to the amount owed.

We keep looking at REOs and look at what the bank bought the house for at auction . I am now wondering if thats an accurate picture of what was owed on the house?

Banks are not allowed to bid over their amount. that is why at a lot of sales the investors who are there ask what they are going up to. When the bank says $110k the investor starts his bid @ $111k if he wants it. IF not the bank take it back for $100 ( one hundred dollars)


What happens when there is a foreclusure with additional liens that are not paid off by the auction? Do the second and third lien holders get paid and if so by who?

if theres not enough money, the other liens are screwed. they get nothing. thats why 2nd mortgages will settle for so little if they know theres not alot of equity.

When you say the 2nd lien holder will settle for so little what do you mean? If you can settle with the 2nd what happens tro the 1st?