What happens to the remaining balance after a home is auctioned for a lower price?

[CJ Moulton]

Hello All,

Recently I have been reading up on Foreclosures, and I went online to look at some foreclosed properties (Auction.com), but there's something I don't quite understand...

I noticed that the starting bid for a lot of properties is $100. Now I am not expecting to show up to auction and get the place for $100, however what if the last bid ends up being much lower than what's owed on the house?

For example:

A property worth $200,000 has started the foreclosure process. The owner stopped making payments around $100,000. (To make things a bit easier) This means the remaining balance is $100,000, but let's say you get the property for a winning bid of $10,000. What happens to that $90,000? Would that become the remaining balance? Is the rest expected to be paid? 

I hope I have explained this in a comprehensive way! Any insight is greatly appreciated.

[William Hochstedler]

Quote from @CJ Moulton:

You know what they say....

Like @Doug Smith mentioned, there might be other liens.  Sometimes you see these small opening bids, but they are second position loans behind much bigger senior loans that won't be extinguished at foreclosure.

So you might pick up a $200K property for $10K with a $250K first position loan on it.  No longer too good to be true.

There are a lot of pitfalls when buying foreclosures.