Question about foreclosure auctions in Baltimore County

[Ruth Lyons]

I'm looking for some insight. I went to an auction to observe yesterday. One house I was interested in was bid high by the lender. His bid was clearly at the ARV level even though the home was in foreclosure and needed work. What is the reason?

[Jeff Kehl]

@Ruth Lyons Don't try to apply logic to it, just assume that's what they'll usually do... Actually there is a good reason. A lot of times that mortgage is insured by HUD, Fannie Mae or another government agency. They bid in at the amount they are owed and then turn it over to the government and collect the insurance. That makes a bit more sense doesn't it? 99% of the foreclosed houses in my market sell for more than an investor would pay so I look for the 1% and then watch the others when they show up after foreclosure.