Is Homestead Exemption a real consideration during auctions?

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I was reading an older book (2000) by Dallow where he states that in foreclosure auctions in NY, the buyer has to pay the homeowner $10,000. But I can't find anything online to confirm that. If anything, it sounds like the receiver/trustee would have to reserve the first $10k of the purchase price and give it to the homeowner before distributing the money to the lien holders. Does that sound right? Is there any case where the actual buyer at a foreclosure auction would need to give money to the homeowner at the auction? Thank you!

Dear Complete,

Rules may be different in your state, but typically homestead applies on an owner-occupied home where the owner has filed for bankruptcy and the trustee (the bankruptcy trustee) has forced the sale of the property. Where I live the exemption is $40,000. So if the property sells over and above the arrearage owed to the beneficiary, the home owner will receive the next $40,000 over that. When this point is reached, the junior leins get paid off insofar as possible. Hope this helps.