bidding at my own foreclosure sale

Submitted by Tony F. from CA - 06/17/2010 - 4:05pm

My home is worth about $320k. The first is $330K, the second is $150k. Both are purchase money loans. if I default on the second and it goes to foreclosure, can I bid at the trustees' sale and basically buy my house back with a low ball bid? Does anyone know about this happening. Please let me know. Thanks.

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Comments

Submitted by Sean - 06/20/2010 - 2:07pm

Go talk to a title company before you do this. It is our belief and understanding that if an owner buys their own house back at trustee sale all the prior debt will re-attach - as such the only thing you will have accomplished is to have paid down your first mortgage, made your loans due in full, and ruined your credit. This has come up a few times recently so we'll try to look into the exact reason why, but we have tried selling houses we bought at auction back to the owner who lost it and this issue prevented their ability to get clean title insurance (ie. without the prior loans).

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