Cancellations


#1

I am assuming that when an auction is cancelled, the borrower has cured the default and the foreclosure process must start all over again.


#2

An auction can also be canceled if a lender is working with a borrower to reduce rates or if the borrower has filed bankruptcy. Sometimes the auction is just delayed.


#3

Typical reasons for cancellation would include:

  1. The borrower cured the default by coming up with the cash, refinancing, selling (including short sale), or getting a permanent loan modification (as apposed to the trial mods during which they leave the owner in foreclosure).
  2. The lender made a mistake in the filing and needs to refile.
  3. The statutory time frame for postponing runs out (1 year in CA).

#4

From what I understand a bankruptcy “most generally” just postpones a forclosure. I then file that property under the new sale date. If it is cancelled then a whole new NOD, 90 days, etc.???


#5

Correct - foreclosures are not typically canceled during bankruptcy, nor while the homeowner is working through a trial mod or other lender workout. Many of the homes I bought at auction had owners that would complain that they received “no notice”. The reality is that they did receive notice months earlier, but didn’t realize that their foreclosure had just been postponing and that the bank does not have to issue a new notice once they are released from the BK or the workout failed.