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Mortgage Glossary

Foreclosure Auction

Mike Starr·Reviewed August 2026

A foreclosure auction is a public sale of a property that has been repossessed by the lender after the borrower defaulted on the mortgage. Properties are sold to the highest bidder, often at below-market prices, and typically sold "as-is" with no warranties. If no acceptable bids are received, the lender takes title and the property becomes REO (Real Estate Owned).