Sale of your home after foreclosure?

I believe you are talking about a foreclosure auction. If that is the case, the lending institution actually has to go to court and sue to get possession of the property. At the hearing, the lending institution will show evidence of the owners failure to make payments and will ask that the property be sold to satisfy the debts of the owner, which include the legal fees and court costs incurred by the lender to bring the case.

At the auction the lender will enter a bid equal to what the court held as judgment against the debts of the owner. In some states the lender has to be present, in others a default bid is entered on their behalf. Sometimes the lender gets their dates or locations mixed up, especially if they have several properties. This can be a good time to pick up a cheap property.

In any case, if someone bids more than the amount the lender bid, that will go to secondary mortgages if any, tax liens if any, construction liens if any, and finally, if there are any monies left over, to the dispossessed owner. Depending on the state, the owner has a right of redemption and the time period can very depending on the reason for the loan. If it was a commercial loan, even on a private residence, the redemption period is usually truncated significantly.

If after repossession the lending institution sells the property for more than what was due by the previous owner, the lender gets to keep that money. It is, after all, their property now.

You're talking many things here. One thing at a time.

There are SIX stages to a foreclosure: pre-foreclosure (late payments), notice of default, reinstatement period, forecolsure auction/sale, redemption period, and eviction.

After the foreclosure sale (i.e. sheriff's sale or trustee sale) the house belongs to someone else, either a buyer or back to the back as REO, with one exception: redemption.

In the redemption period, you can still 'redeem' the deed on the house by paying off the loan AND all the fees and penalties. Keep in mind that not all states allow a redemption period, it could be as little as 15 minutes if there is one, or as long as TWELVE MONTHS. If you sell the house during the redemption period, you basically take the money, redeem the mortgage, then turn around and sell it to the buyer. In that case, you keep any excess.

If the house was auctioned off, and as you said, the house was sold AT the courthouse / sheriff's sale / trustee sale for MORE than the obligations on it, the excess is called "overbid". And if you were the ex-owner, you can claim the overbid for yourself by going down to the courthouse, show ID, and sign some papers, and forego the redemption altogether (if there is one).

In some states, there is no deficiency judgement allowed. If the auction isn't high enough, the lender have to eat the difference. In other states, the lender can go after the ex-owner if the sale price at foreclosure auction does NOT meet the obligations.

So, again, consult a real foreclosure specialist for help.

Here's the problem. If the house is foreclosed, then it belongs to the bank. It belongs to the bank. Period.

Prior to the foreclosure (or at the Trustee Sale), if the house is sold, then any excess is returned to the owner.

Ghost is 100% correct.