Assignment of Bid - How does this work?

Question

Purchasing a note just before auction. The foreclosure attorneys have said they will do an 'assignment of the bid' at sale. How does this really work?

Here is my understanding. Please correct me!

1) Close the purchase of the note. Record AOM (does this even need to be recorded at this stage?). Sheriff sale in three weeks.

2) Contact lawyers and tell them you are the lender (foreclosure case still in original lenders name). Provide opening bid at your reserve.

3) At the auction, someone bids above the reserve.

Then what? The original note seller 'assigns' me the proceeds? The lawyers do? How do they even know I am the lender? Is someone verifying the AOM, allonges, etc. at this stage?

I just do not understand what the "assignment of the bid" really entails.

More preciously, how do we go from the winning auction, to 'assignment of a bid', to getting the money to my bank account?

Thank you in advance.

Chad U. · Answer

As I pointed out in your other post, you should try to get an Substitution of Plaintiff or an Assignemnt of Judgement instead of Bid.  Assignment of the bid means that, in the event the plaintiff is the successful bidder at the foreclosure sale, the assignee of the bid would step into the Plaintiff's shoes solely for the purpose of being the recipient of the certificate of title. Assignment of the judgment means that the assignee would own any and all rights relating to the judgment, including any deficiency rights, and would be able to substitute itself for the current plaintiff in the foreclosure action if, for example, there were any omitted interests in the foreclosure that needed to be extinguished.

It is uncertain as to whether a recipient of an assignment of bid can institute a re-foreclosure action if the current lender failed to join all the interested parties in the foreclosure suit. An argument can be made that the re-foreclosure rights are held by the judgement holder, and that you only received the right to bid up to the judgment amount. Accordingly, you are going to want to make sure you get the whole "bundle of rights" that come with the judgment to mitigate against any risk.