In Chicago foreclosure auction sales, the winning bid is often under the amount due for the mortgage. Does winner have to pay the remaining balance?

Asked by carolaklass, 60625 Wed Oct 30, 2013

Help the community by answering this question:

+ web reference
Web reference:

Answers

11
Suzanne Hami…, Agent, Orland Park, IL
Wed Oct 30, 2013
It all depends on the terms of the auctions, but in most cases - no. You bid on the home and are provided with a special warranty deed which excludes the mortgage. You are provided clear title.

Sherriff or tax auctions are often different. You need to refer to the conditions of the auction, which are usually listed on the websites.

One thing to be careful of with auctions are the terms. You may be responsible for back taxes, mechanics leins, city violations, and even removing the current occupants - be it the former owner or tenant. You need to look at the terms very carefully.
1 vote
Thanks, Suzanne!
Flag Wed Oct 30, 2013
excellent summary.
Flag Wed Oct 30, 2013
Daniel Mirea, Agent, Chicago, IL
Fri Nov 15, 2013
Just make sure you will receive a special warranty deed! Auction.com (example) has some properties for sale where they offer only a quiq claim deed (Way much risky for the buyer....... might be loans /debs not reported in the foreclosure process and will be transfer to the new buyer) Either way i would recommend you to have a very good Real Estate Attorney!

Good Luck !!
0 votes
Evelyn S. Fr…, Agent, Chicago, IL
Thu Oct 31, 2013
Unanimously NO...taken care of at auction between bank and previous home owner.

Hope all these replies help!
0 votes
Dorie Westme…, Agent, Chicago, IL
Thu Oct 31, 2013
No. The buyer does not pay back the deficiency (difference between current mortgage amount and auction sale price). The deficiency may be the liability of the prior homeowner who was foreclosed depending on whether the bank/investor who held the mortgage pursues the deficiency and the court.
0 votes
Bill J Delig…, Agent, Naperville, IL
Thu Oct 31, 2013
No - the bank will take the loss on this.
0 votes
Santiago Ken…, Agent, Chicago, IL
Wed Oct 30, 2013
Nope of course not ...That's the bussines bank
0 votes
Jacqueline S…, Agent, Chicago, IL
Wed Oct 30, 2013
No, that is an issue between the bank and the original borrower.
0 votes
Matt Laricy, Agent, Chicago, IL
Wed Oct 30, 2013
Everyone of them is different. You have to read the rules for each.
0 votes
Thanks, Matt.
Flag Wed Oct 30, 2013
Jorge Vega, Agent, Chicago, IL
Wed Oct 30, 2013
Great job Suzanne!

Research, research, research. You will find out quickly that what seems like a great deal soon becomes an enormous headache. Good luck!
0 votes
Philip Sencer, Agent, Chicago, IL
Wed Oct 30, 2013
No. The previous mortgage balance on a property that completed the foreclosure process and is now owned by the lien holder, bank, is irrelevant. The price at auction should be market value today which is almost 100% much less than whatever the previous mortgage amount was 3-4-5-6 yrs ago.
0 votes
Thanks, Philip!
Flag Wed Oct 30, 2013
Sohail Salah…, Agent, Chicago, IL
Wed Oct 30, 2013
Carol,

The previous owner who has has the foreclosure against them is still responsible unless the bank has let them off the hook however if it is a foreclosure this leaves the original owner open to future liabilities.

The new owner is not responsible for the previous owners liability on the home.
0 votes
Thanks, Sohail!
Flag Wed Oct 30, 2013
Search Advice
Search
Ask our community a question

Email me when…

Learn more