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What is a foreclosure?
Foreclosure is the equitable proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property ( immovable property) due to the owner's failure to comply with an agreement between the lender and borrower called a " mortgage" or " deed of trust." Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is typically said that "the lender has foreclosed its mortgage or lien."See more on WIKIPEDIA
Foreclosure auction
When a bank auctions a repossessed property, they will typically set the starting price as the remaining balance on the mortgage loan. Many times, however, in this market the bank will set the starting price at a lower amount if it believes the real estate securing the loan is worth less than the loan. This is not usually the case in the state of Alabama.
In the case where the remaining mortgage balance is higher than the actual home value, known as an Upside-down mortgage, the bank is unlikely to attract auction bids at this price level. A house that went through foreclosure auction and failed to attract any bids becomes property of the bank. It is called " REO" (real estate owned). The bank will typically try to sell it at a loss later through standard channels. See more on WIKIPEDIA
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