House Did Not Sell At Foreclosure Sale Date

Foreclosure Sale Date And Your House Doesn't SellForeclosure sale date has passed, and your house does not sell. How can that happen?  Is it even possible?  Not only is it possible, but it is becoming more and more common in Northeast Ohio.  It is no shock that home values in this area have dropped continuously since 2008.  The rest of the country is climbing out of recession.  Not Ohio.  Home values drop almost as fast as the employment rate.  When you are underwater in your mortgage it is impossible to sell your property unless the mortgage bank approves a short sale.  These same conditions limit success of the foreclosure sale  as well.

Traditionally this is what would happen at the foreclosure sale date in Ohio:

  1. The parcel is called for bidding
  2. Your mortgage bank starts the bidding in an amount sufficient to protect the value of its collateral.
  3. Anyone else interested in the parcel bids on it.  A true auction, just like you see on TV.
  4. If no one else bids a sufficient amount, the bank buys back the property.
  5. In about 3 weeks the bank files the confirmation of sale, which transfers the deed out of your name.

After the bank took title they would hire a realtor to fix the place up and sell it to get their investment back.  This system falls apart when the market will not allow for the sale of any real estate.  The real estate market here is dead.  When banks buy property at a foreclosure sale, they are stuck with it.  The bank is responsible for all the expense and duties of any other land owner.  Imagine having to do these things for hundreds of thousands of properties.  The expense can be overwhelming.  As a result banks rarely buy property at foreclosure sale date, especially in depressed real estate markets like Lorain County, and parts of Cuyahoga County.

The Bank Walk Away

If no investors jump into the bidding, the property doesn’t sell and it stays in your name.  As long as it is in your name you have all those responsibilities and costs of property ownership, even if you moved out because of the foreclosure.  Ultimately if the property does not sell at foreclosure sale date, the bank will vacate the foreclosure judgment and order of sale, and ultimately voluntarily dismiss the entire foreclosure.  You then own the property.  It still has a lien from the bank, but you have no mortgage to pay.  This is called a bank walk away.  Because of the lien, if you do ever sell, the bank gets their money plus interest.

1099-A: You Pay Tax On The Mortgage Amount

I have had people come to me who get a Form 1099-A, from the bank it they moved out of the property due to the foreclosure.  A is for, “abandon.”  They foreclose, you move, they don’t follow through, you have to pay income tax on the whole mortgage balance.  What a system.  Don’t you love America?

If you want to stay in your home remember:  there is no guarantee that either no one will bid the foreclosure sale date, or the bank will walk away from your parcel of property.  Your best bet is to file a chapter 13 bankruptcy to create a real plan to save your home.  You can avoid the 1099-A problem in the chapter 13, or by filing a chapter 7 bankruptcy case.

Creative Commons License photo credit: Casey Serin


Bill Balena

Bill Balena is an attorney with offices in Westlake, Ohio. He represents consumers in Chapter 7, Chapter 13, and Federal Student Loan Resolution. He is a former city prosecutor, and an accomplished OVI, DUI, DUS and criminal trial attorney.

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William Balena
Lorain and Cuyahoga County Bankruptcy Attorney

30400 Detroit Road
Suite 106
Westlake, OH 44145
(888) 633-5426 Toll Free
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(440) 365-2000 Local Elyria Number

By appointment in Elyria

I am not your lawyer, and nothing in this site creates that relationship. Bankruptcy law requires that for me to be your bankruptcy lawyer you and I must have a written contract. So, unless we both agree in writing, you are not my client.

I am a debt relief agency. I help people file for bankruptcy relief under the bankruptcy code.


  1. […] Have You Had A Fraudulent Foreclosure Filed Against You? Written by Bill Balena in Foreclosure 0 Comments #leftcontainerBox { float:left; position: absolute; top: 60%; left: 70px; } #leftcontainerBox .buttons { float:left; clear:both; margin:4px 4px 4px 4px; padding-bottom:2px; } #bottomcontainerBox { height: 30px; width:50%; padding-top:1px; } #bottomcontainerBox .buttons { float:left; height: 30px; margin:4px 4px 4px 4px; } #leftcontainerBox { float:left; position: absolute; top: 60%; left: 70px; } #leftcontainerBox .buttons { float:left; clear:both; margin:4px 4px 4px 4px; padding-bottom:2px; } #bottomcontainerBox { height: 30px; width:50%; padding-top:1px; } #bottomcontainerBox .buttons { float:left; height: 30px; margin:4px 4px 4px 4px; } Suspect a fraudulent foreclosure? I heard this term for the first time last week. Someone told me they had one filed against them. I had to ask for an explanation. Apparently this is the common term now being used for the bank walk-away. […]

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