Unless the property goes through foreclosure auction and becomes bank-owned, outstanding liens and fees are simply transferred to the new owner.
The property narrowly escaped a foreclosure auction late last month when the business filed for bankruptcy a legal maneuver that prevented the auction from going forward.
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The former heavyweight boxing champion, who has fallen on hard times due to failed business ventures, two divorces and hefty six-figure annual child support bills, recently lost his mega-mansion in a foreclosure auction.
The auction drew about 1, 400 people, twice as large as the crowd last year, when the California-based Real Estate Disposition Corporation held its first foreclosure auction in New York City, according to The New York Times.
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Mr. LAPPE: Purchasing at a foreclosure auction today is probably much less of a deal than it was a year ago or two years ago, because previously, with credit standards being fairly loose, an investor who bought a property to foreclosure sale stood a pretty good chance of finding a qualified buyer to sell the property to.
This is when a borrower negotiates with his lender to sell his home at a loss, taking a bet that home prices will further depreciate and that a short sale will bring in more cash for the lender than would a foreclosure and auction.
There were nearly 650, 000 foreclosure filings -- which include notices of default, auction sales and bank repossessions -- issued during the first quarter of 2008.
Mr. ALI: What we do at Pacific Coast Capital is we basically get involved in advising individuals that have had loans that have defaulted and preventing them from going the full foreclosure route, which the end result of foreclosure is a total loss when you lose your home at auction.
The potential buyers at this auction are regulars, speculators who travel almost pack-like from each of the foreclosure auctions that are held throughout the day.
Foreclosure filings declined only slightly last year, but the counselling service saved over 4, 000 homes from the auction block.
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