Does a Lender Mark Note Paid in Full After Foreclosure and Return to Borrower?
Full Question:
Answer:
In foreclosure, the property is sold to the highest bidder at auction, who must pay either cash or certified funds. If the lender is bidding, the amount should be the lesser of the total debt plus cost, or fair market value as determined by an appraisal. While no exact formula is provided, the bid price cannot be so low as to be unconscionable. If the lender does not intend to pursue a deficiency judgment, it is customary to bid debt plus cost. If the lender does intend to pursue a deficiency judgment, the property should be appraised, and the lender should bid no more than fair market value. Any deficiency must be pursued judicially. Any time the lender bids the debt, the note is deemed paid in full.