Where does the foreclosure auction proceeding goes?

Question

I have this question bother me for a while, can somebody explain to me where does all the foreclosure proceeding go?  For example, if one won a bid through a county auction for a traditional mortgage foreclosure.  Say the winning bid is 300K and this person paid the full 300K plus all the fee/tax to the county clerk office.  If the final judgement for the bank is 200K, I assume the bank as first mortgage will only get the 200k.  If no other party claims the lien, then where does the extra 100K go, to the bank or to the county? If after the auction, the HOA claims that there is also a 10K debt to the HOA, can they go after the surplus 100K paid at the auction or they have to go after the new owner/auction winner?  Thanks

Chris Seveney · Answer

@Matt James

Goes to the owner of the property - a foreclosure sale is just that - a sale. And their are orders of priority for lien holders.

If $200k was owed to bank they get their money, any subsequent lien holders get theirs then if there is money left over it goes to the homeowner.

Chris Seveney · Answer

Shoot me a PM and I can give you several.

Matt James · Answer

Thank you all for your input.

The HOA was notified of the Lis Pendens but they didn't do anything at that time. Would that be considered their failure to act and lost opportunity to ask for debt afterwards?

At the same time, can anyone recommend a good Florida lawyer for this matter please?

Gina Stern · Answer

@Matt James, Chris is correct.  In Florida, the HOA dues would be on the 3rd party seller BUT you should and could always negotiate AND most HOA are going to ask for more than they are should and even allowed to ask for. Crazy amounts more than they are actually owed hoping some poor sap investor will overpay them.  Always have an attorney working with you for these specific scenarios.

Chris Seveney · Answer

@Matt James

There are a lot of factors in this, including if they were properly notified of the foreclosure sale, the state it occurred in and if they had filed a lien.

I am not an attorney and have not had to run into this situation.  This is a great question

Now can they come after you for it if you acquired it via foreclosure - again I believe it depends on state laws but this is where you will want to get an attorney involved

Matt James · Answer

Thanks Chris. I see. That makes sense. The original home owner gets the left over. Now a follow up question is:  If the auction was done and payment was made.  After a few months, if the HOA jumps out claiming there was a 10K against the house but they did not put a lien on it before the auction.  Can they claim it now against the left over money?  Or they have to claim against the new owner?

Appreciate it!

Where does the foreclosure auction proceeding goes?

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