Court auction

Court auction is an auction which takes place at a public location designated by the court.

If a property owner fails to pay the mortgage, the mortgage holder can foreclose on that property. If the owner is unable to make sufficient payments, the property can be sold at auction. The time and place of the auction is published in official records.

In case the value of the debt being foreclosed on is substantially less than the market value of the real property, this can finish the trouble for the debitor by paying all the credits.

In Germany the court may suspend the auction for 6 months, if the debtor requests for that and it is justified by an emergency, i.e. he can't find a housing adequate for his physical disability. The creditor can object twice if the profit is not sufficient for the payment. The bidder must show a security in the amount of 10% payable immediately. The highest bidder becomes the owner of the real property at the end of auction. In case the value of the debt being foreclosed on is higher than the market value of the real property, the credits are managed in an insolvency proceeding.

Spanish mortgage holders are responsible for the full amount of the loan to the bank in addition to penalty interest charges, and court fees.

Historically, the vast majority of judicial foreclosures have been unopposed, since most defaulting borrowers have no money with which to hire counsel. The highest bidder at the auction becomes the owner of the real property, free and clear of interest of the former owner. In 2009 there was a growing consensus that the deepening collapse of the housing market was at the heart of the country’s acute economic downturn. The rules for court auction differ in the states.

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Wikipedia