Much to their embarrassment in many cases, the notices state the borrower's name, the date that the loan was made, and the address of the property, among other information. Furthermore, the date of the proposed Trustee's Sale (which is a courthouse steps auction) is also provided. These foreclosure sales used to be a pretty good way to purchase property but due to our current market conditions and the bubble environment of the 2004-2007 period, most of these properties have more owed against them than they are now worth.
The way these courthouse steps auctions work is as follows:
- Literally on the courthouse steps, an attorney (or paralegal in some cases) reads the legal notice in it's entirety and also the terms of the sale.
- The attorney then states the lender's opening bid which is normally equal to what the lender is currently owed including legal costs, late fees, and any other charges.
- Bidding opens but all bids must be cash only - No financing is generally available because typically the high bidder must deliver a cashier's check within anywhere from an hour to 24 hours after the sale is completed. For this reason, unlike a typical auction, these courthouse steps auctions are very sparsely attended.
- If no participant bids more than the bank's opening bid, the property reverts to the bank and the foreclosure process is completed.
- The bank then will typically hire a realtor (like myself frequently) who will manage the property and market it at whatever the bank decides to sell it for. The bank is not limited to the price that they bid at the auction but can list for more or less than that amount.