Right of Redemption Concern

[Eric Peterson]

Hello everyone.  I've read a tremendous number of posts here in the last few weeks.  I haven't seen this particular question addressed so I hope it is worthy of your input and experience.

Situation summary: Property coming up for sheriff's auction. Judicial foreclosure. I'll use round numbers. 100k left on loan in 1st position. HELOC in 2nd position is foreclosing and going to auction with 50k due (minimum bid). Market Value 250k. Here in Oregon we have a 180 right of redemption period. Here is my concern. Let's say I bid and win the auction for 50k on the 2nd loan. While I'm waiting for the redemption period to expire what happens if the 1st decides to foreclose? If I let someone else win the auction on the 1st I'm completely out of luck. So I bid it up (lets say to 175k so that now my total investment is 50k on the 2nd and 175k on the 1st). My question is what happens to the extra 75k that was bid in excess of the outstanding 100k 1st loan? Does it go to the original owner as listed on the original note or would it go to the "current" owner who I think would be me since I purchased the 2nd? Is the answer controlled by state statute or by the wording of the note or something else?