As of January 2011, one in every 93 households in Nevada was in foreclosure. In Arizona, that number was one in 175, and in California, one in 200 [source: CNBC]. With some areas of the country showing such high foreclosure rates, there's a good chance that you or people you know are headed for, or are already in, foreclosure.
It can be a very sad situation, as many who love their homes are heartbroken to lose them. While they watch helplessly as their homes slip away, they often wonder if they should try to bid on their own home during the auction. Can they actually do this? Yes -- legally, they can. But is it really a good idea? Read on.
If you decide to bid on your own home, you have some major hurdles ahead. First, you need to have the cash to buy it outright. Generally, a person whose home is in foreclosure doesn't have that sort of spare change lying around.
Buying your home back for less than you owed is a rarity. If you're the winning bidder, you must pay all that's owed; none of the old debt goes away. The balance owed on the mortgage remains, as does any debt from additional mortgages. And now, with the foreclosure procedures, there will be foreclosure costs, default interest payments, fees and any other costs that have been amassed, so it's likely that the total will be more than you owed in the first place.
You can try to renegotiate the other loans, but there's no guarantee. Without successful renegotiation, you're still on the hook for the full amount, or possibly more.
Next up, we'll look at a couple of other ways in which you might be able to keep your home.