Foreclosure - REO ???

[pambysue]

I have a question regarding something I had read that states if the house isnt sold at auction, it goes into something known as REO (Real Estate Owned).
I received a notice that an auction sale was scheduled for april 6th but have not heard anything since and have not seen any notices of sale anywhere in any papers or on my house.
Does anyone know when a 'deficiency' amount would kick in for the amount that wasn't brought in from an auction sale? Example: If I owe $90,000 on my house and it doesn't sell at auction. Does the lender automatically get it for the 'low' starting bid (lets say they get it for $50,000) and then can sue me for $40,000??? I am very confused as to how this 'deficiency' amount would be determined and at what point they would figure out the deficiency total and sue me.
Also, is there a website anywhere that I could go to and see if it sold or what is going on?
Thankyou all!!

[SinkingFast]

Real Estate Owned are properties that went to Foreclosure and the Bank/Lender wound up "buying" them back at the Sale. REO properties are carried as a loss on the Lender's balance sheet until they can sell the property.

Generally there are not any other bidders at a Foreclosure Sale. Most States, the rules to take Title to a property in Foreclosure are such that regular folk can't do it financially. Investors are generally looking for a better bargain than what they might have to pay at a Sale.

Whoever buys the house is getting the property "As Is" in condition. Any repairs that need to be made are the buyer's responsibility. The buyer may have to pay to have the original homeowner evicted. If there are Liens, the buyer has to take care of those. If the owner was in arrears on HOA dues, that has to be paid too. So there are potentially lots of other costs a Buyer might have.

When a Lender buys back a house at Foreclosure, there's all the costs listed previously. Plus the Lender has the costs of the the Foreclosure as well. Hiring a law firm to act as Trustee or Referee of the Sale, advertising, etc.

It may take a while for the Lender to tally all their costs. Then you'll get notice of the deficiency balance that's due.

[pambysue]

Thankyou Sinking! That really made a lot of sense.

So, would I receive a 'deficiency' notice or would they just start taking my bank accts (IF I had anything in there!) & garnish my wages?

[SinkingFast]

What happens once the Lender has a final accounting may well vary by the State the property is located in.

Generally speaking, unless Foreclosure Law allows for some direct settlement, the Lender will probably have to sue the Owner first to recover any deficiency balance. After the law suit, then the Lender could move forward to seek Wage and/or Banking Institution Garnishment Orders.

[pambysue]

Thankyou again, Sinking! I truly appreciate all of your words of wisdom!
It sounds like I should be ok..even if there is a deficiency (which I'm SURE there will be), my BK should be filed before they would get a lawsuit. The house still hasn't even had the auction sale. I received a notice today that it has been postponed from 4/6 until 4/20. From what I understand, NY State is not too fast moving with these things.

[SinkingFast]

NY is a Judicial Foreclosure State. Very rarely does a non Judicial Foreclosure occur in NY. Something to do with "perfecting" the Deed/Title. The Judicial process guarantees that. You've probably got 15 to 18 months, minimum, just for the Foreclosure process.

Also, if this is your primary mortgage, the Lender may not be able to seek a deficiency balance against you. Many States, the borrower cannot be held accountable for deficiency balance on the primary mortgage.

That would be a question to ask attnys as you Consult around.