What Happens If a Foreclosure Auction Is Canceled?

Foreclosure auctions allow mortgage lenders to sell a piece of property in order to raise money to pay off the balance due on the mortgage loan. A foreclosure auction may be delayed, or sometimes canceled entirely, for a variety of reasons. The effect of a canceled auction depends on the reason for the cancellation.



It is not uncommon for foreclosing lenders to cancel foreclosure auctions in order to reschedule them for more convenient times. A lender who cancels a foreclosure auction generally has the option of rescheduling a new auction at any time in the future. The lender may announce the new date to those present at the canceled auction, and the lender will also probably provide published notice of the new auction.


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Sometimes a foreclosure auction is canceled permanently, meaning the foreclosing lender never reschedules a new auction date. Lenders are never legally required to foreclose, so a foreclosing lender could decide at any time not to proceed with the foreclosure auction. Nobody can force the lender to hold the foreclosure auction if it decides not to.


Responsible Party

In most states a third party hired by the lender is actually the person who will coordinate the scheduling and operation of foreclosure auctions. In judicial foreclosure proceedings it is typically the local sheriff's department that handles the foreclosure auction, while in nonjudicial power of sale foreclosures it is generally a title company or attorney, called a trustee, that handles the foreclosure auction. If you need to obtain further information about why a foreclosure auction has been canceled, and whether it will be rescheduled, you will need to contact the sheriff's department or the trustee, as applicable for each foreclosure.


Reasons for Cancelation

Mortgage lenders have numerous reasons for canceling foreclosure auctions. Often, the lender works out a new repayment plan with the borrower and property owner. As long as the borrower fulfills the terms of that new plan, the lender will never foreclose. Additionally, most state laws give the borrower the right to reinstate a mortgage at any time before the foreclosure auction takes place. The borrower reinstates by making a large enough payment to bring the mortgage current. Finally, the foreclosure auction may be canceled permanently if somebody, like the borrower or the owner of a second mortgage, pays off the full balance due on the mortgage.



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