Q: Sheriff’s sale was held and property reverted to the beneficiary. Home is now in the redemption period.
Lender now selling their interest in the sheriff’s deed at auction. If this auction brings more than the sheriffs sale and the homeowner redeems the property, what happens to the difference between the sheriffs auction price and the lenders interest auction price?
A: If the lender purchased the property at the sheriff's sale and subsequently re-sells it, the new owner simply steps into the lender's shoes as title-holder. The redemption price is not affected. For example, if the bid at the sheriff's sale was $100,000, and the lender re-sold the property for $200,000, the redemption price is still approximately $100,000. The profit made by the lender is retained by the (former) lender. The purchaser would in this example have made a bad deal because if the property is redeemed, the purchaser will have overpaid by approximately $100,000.
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