My Home was Sold at a Sheriff Sale For $100. What Happened?
Once your mortgage lender has received a Final Judgment of Foreclosure on your home, they can schedule a Sheriff Sale. To learn more about this process, see our New Jersey Sheriff Sale Timeline.
When your lender schedules the sale, they can choose to start the bidding at any amount, up to the total amount owed. Many times, the total amount owed is more than the property is actually worth. This can be called “under water.” If the house is “under water” and the lender asks the Sheriff to list the property for sale at the full amount owed, the Sheriff will be seeking to sell the property for more than it is worth. In those instances, no one will want to purchase the property at the Sheriff Sale and the lender will be forced to make a minimum bid of $100 or $1000, and they will own the property. In other words, if you owe your lender $250,000 when the house is foreclosed upon, and the current market value of the home is only $200,000, if the lender asks for $250,000 at the Sheriff sale, none will buy the property and it will go to the lender for a minimum bid.
If you owe less than the market value of the home at the time of the Sale, you should file a motion with the Court and ask for time to sell the property so that you can keep your equity.
If your lender decides to sell it for less than market value, it will most likely be bought by a Third Party Purchaser.
Is It Too Late to Stay in My Home?
New Jersey homeowners are entitled to a 10 day right of redemption period following the sheriff sale. During this period, you can still reclaim your home by paying your lender the full amount due.
For other examples of situations where you can stay in your home even after a sheriff sale has been scheduled, see our blog post: Is It Too Late to Save My Home?
Contact Ira J. Metrick Today
At the law office of Ira J. Metrick, we can help you understand your options when facing foreclosure or a sheriff sale, including applying for a loan modification. We can review your case and make sure that your lender followed all proper procedures during the foreclosure process and did not commit any violations. Contact us today to discuss your situation and take the first step towards staying in your home.